As we saw in the Managing External Forces Tutorial and Marketing Planning and Strategy Tutorial, there are many components, both internal and external, that must be considered within the marketing planning process. In fact, for many marketers creating the Marketing Plan represents one of the most challenging and burdensome tasks they face. Fortunately, over the years marketing academics and professionals have put forth theories, models, and other tools to aid planning. Possibly the most widely used planning tool within marketing is the Product Life Cycle (PLC) concept.
The basic premise of the PLC is that products go through several stages of “life” with each stage presenting the marketer with different challenges that must be met with different marketing approaches. For example, marketers may find what works when appealing to customers early in the life of a product may not be as effective when targeting new customers after the product has been on the market for a while.
There have been several attempts over the years to define the stages that make up the PLC. Unfortunately, the PLC may be different for different products, different markets, and different market conditions (e.g., economic forces). Consequently, there is not a one-model-fits-all PLC. Yet there is enough evidence to suggest that most products experience patterns of activity that divide the evolution of the product into five distinct stages. These stages are:
- Development – Occurs before the product is released to the market and is principally a time for honing the product offering, finding funding to launch the product, and preparing the market for product introduction.
- Introduction – The product is released to the market and sales begin though often gradually as the market becomes aware of the product.
- Growth – If the product is accepted it may reach a stage of rapid growth in sales and in profits.
- Maturity –At some point sales of a product may stabilize. For some products, the maturity phase can be the longest stage as loyal customers continue to purchase. However, while overall sales may grow year-over-year, sales in terms of percentage increase may be small compared to previous years.
- Decline – All products eventually see demand decline as customers no longer see value in purchasing the product. Similar to the Maturity stage, the Decline stage may last for a long time.
(Tap image for larger view)