1. The PLC
BMI3C

2. The PLC
The Product Life Cycle describes the changes in consumer demand with regard to a product over a period of time
Marketers use this system to determine how long a product will last

3. Stages in the PLC

4. Product development The company does R&D to come up with a new product
No sales happen during this time, but the company spends a lot of money

5. Introduction
Launching a new product into the marketplace is VERY expensive
Manufacturers, promotion, distribution, etc.
Marketing efforts are focused on selling to “early adopters” (consumers who like to be first to buy)
Expenses still outweigh revenue by a lot during this stage

6. Growth
Most crucial stage for advertising as this is the time when the product will either catch on or fail
Marketers will scrap a product if it does not do well in this stage (this is called a bust as the costs of production, etc. have not been recovered)
The faster a company can reach the growth stage, the faster it can begin to make a profit

7. Growth
The first company in the growth stage will pay the most in advertising
but no major competition
The idea is to recover the high cost of introduction before competition becomes strong and the price drops
As competition enters, marketers must modify their original product (add features, improve quality, lower price) in order to maintain their market share

8. Maturity Period during which the sales of a product increase slowly
Advertising is done to keep the name of the brand with the consumer, though promotional costs are not as high as the previous 2 stages
Major costs have been recouped by now, so large profits are made during this stage
Goal is to keep this stage going as long as possible…

9. Decline Company is unable to find new customers
Company will try to redesign, repackage, etc. to try to reverse the decline process
Company may remove the product from the market

10. The Decision Point
If the decline persists, the company must decide the future of this product
based on research the company may decide to:
reformulate, repackage, (new & improved), reprice, new promotion
Discontinue the product

11. The Decision Point Example: Arm & Hammer Decline in sales
Research shoed a drop in the amount of home baking
Instead of discontinuing the product, the marketers looked for a new target market
Promoted the product’s ability to absorb odour (i.e. from the fridge)
Plan worked: product entered new growth stage

12. Nontraditional Product Life Cycles
What would the PLC look like for a…
Fad… (Crocs)
Niche…(skateboard wheels)
Seasonal…(pumpkins)

13. Fads
a product that is extremely popular for a very brief period of time, a fad dies very quickly
this is a high-risk adventure, businesses do well if they get out of the market just as the fad reaches its peak
if a company does not get out in time they are left with large product inventory that no one wants to buy

14. Fads
What does the PLC look like?

15. Trends
a mass movement towards a particular style or value and it has a more lasting effect on the marketplace
by paying close attention to trends, marketers can predict which markets will grow in the future
eg. organic foods

16. Niche Market
a very short growth stage that leads to a solid maturity stage
market is very small, therefore there is little competition (there are not enough consumers to make the market attractive to competitors)

17. Niche
What does the PLC look like?

18. Seasonal Market seasons can impact upon a product
Snow blowers, ski resorts
marketers anticipate periods of high and low demand
marketers work to create opportunities outside the peak season

19. Seasonal
What does the PLC look like?

20. Questions What is the risk to a marketer of jumping on a fad?
People seem to be interested in products that aren’t harmful to the environment… is this a fad?
What’s the difference between a fad and a trend?
What are some current trends?
How could a business take advantage of these trends?