Product Life Cycle (PLC): Definition, Stages, Strategies, and Examples

What is Product Life Cycle (PLC)?

The product life cycle (PLC) represents a product’s journey from its market debut to its eventual removal. It consists of four main phases: introduction, growth, maturity, and decline. In essence, it’s like a roadmap for a product’s evolution.

A product is new to the market during the introduction phase, often requiring substantial advertising and promotion. The growth phase sees increased demand, production, and distribution expand. Maturity is marked by stable sales and competition, making differentiation crucial. Finally, the decline phase arrives as sales wane, often due to market saturation or new innovations.

This concept guides management and marketing decisions, such as when to increase advertising, reduce prices, expand into new markets, or update packaging. It’s known as product life cycle management, helping businesses adapt to each stage’s unique demands. Companies can optimize their strategies and product longevity by understanding and leveraging this cycle.

How Does Product Life Cycle Work?

The product life cycle is like a story that every product goes through. First, it’s introduced to the world, needing attention and promotion. Then, it starts growing, becoming popular, and more people buy it. In the maturity stage, it’s well-known, and sales are stable.

But nothing lasts forever; eventually, it declines, and fewer people want it. Businesses use this cycle to decide when to advertise more, change prices, or create something new. It’s a roadmap that helps products stay successful and adapt to what people want over time.

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History of Product Life Cycle

The concept of the Product Life Cycle (PLC) was developed in the mid-20th century. Raymond Vernon, an American economist, first introduced the idea in his 1966 book “International Investment and International Trade in the Product Cycle.”

Vernon’s main focus was on how products, particularly in the context of international trade, evolve through different stages. He argued that products start as innovations in developed countries, then move to the growth phase in other developed countries, and eventually reach saturation and decline stages.

Another important figure in the development of the PLC concept is Theodore Levitt, a marketing professor, who wrote about it in a 1965 article for the Harvard Business Review. Levitt emphasized the challenges faced by innovators and how they often struggle during the introduction phase.

These ideas laid the foundation for the modern understanding of product life cycles, which businesses now use to guide their marketing and strategic decisions.

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Stages of Product Life Cycle

So far we understood the definition of product life cycle. Product life cycle is an important concept in the marketing world. Now, let’s understand its five key stages – introduction, growth, maturity, saturation, and decline including the marketing strategies needed in each stage.

Introduction Stage

The introduction stage in the life cycle of product is like when a new kid arrives at school. At first, not many people knew them. During this stage, a new product is introduced to the market. People don’t know much about it, so the company needs to work hard to make it known.

Three marketing strategies for this stage are:

• Heavy Promotion: Just like our new kids might need to introduce themselves to others, the company needs to advertise a lot to tell people about the product.
• Unique Selling Points: The new kid might have special skills or talents to stand out. Similarly, the product should highlight its unique features to attract attention.
• Limited Distribution: Sometimes, the new kid might want to make friends with a few people first. Similarly, the product may start by selling in specific areas to test the waters before going big.

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Growth Stage

The growth stage in the product life cycle is like when a tiny plant starts growing big and strong. At this point, more people are discovering the product, and sales are increasing quickly.

Three marketing strategies for this stage are:

• Market Expansion: Just like our growing plant needs more space, companies should aim to enter new markets or regions to reach more customers.
• Product Improvement: Just as a plant needs proper care to grow well, the product should be enhanced with new features or improved quality to keep customers interested.
• Competitive Pricing: Similar to offering a good deal on a growing plant, companies can use competitive pricing to attract even more customers and increase market share.

Maturity Stage

The maturity stage in the product life cycle is like when you have a favorite toy that you’ve had for a long time. It’s very popular, and lots of people have it.

Here are three marketing strategies for this stage:

• Diversification: Just like trying different games with your favorite toy, companies can create new versions or variations of the product to keep customers excited.
• Cost Leadership: Companies can aim to become the best at making the product efficiently, which can lead to lower prices, making it even more attractive to customers.
• Market Saturation: Since many people already have the product, companies can focus on keeping their current customers happy through excellent customer service and loyalty programs.

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Saturation Stage

The saturation stage in the product life cycle is like when everyone has the same toy, and it’s not as exciting as it used to be. At this point, almost everyone who wants the product already has it.

Here are three marketing strategies for this stage:

• Product Differentiation: Companies can make their product stand out by adding new features or improvements. It’s like giving your toy a cool upgrade.
• Global Expansion: If most people in one area already have the product, companies can start selling it in new places around the world, where it’s still new and exciting.
• Customer Loyalty: Businesses can focus on keeping their loyal customers happy with rewards and special offers, like getting extra outfits for your favorite toy.

Decline Stage

The decline stage in the product life cycle is like when a once-popular game becomes old and not many people want to play it anymore. Sales start going down, and it’s not as exciting as before.

Here are three marketing strategies for this stage:

• Product Diversification: Companies can try making different versions or new products related to the old one, like making a sequel to a classic video game.
• Cost Cutting: To keep things going, businesses can find ways to make the product more affordable to produce, so they can sell it at a lower price.
• Niche Marketing: Instead of trying to sell to everyone, companies can focus on a small group of loyal customers who still want the product and make it special for them.

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Strategies For Product Life Cycle

Here are four strategies commonly used at different stages of the product life cycle, each with additional details:

Product Innovation

During the introduction stage, focus on research and development (R&D) to create a unique product with innovative features that stand out in the market. Invest in technology and design improvements to meet the specific needs and preferences of early adopters. Build brand awareness through marketing and educational campaigns to inform consumers about the benefits of your innovative product.

Market Expansion

In the growth stage, expand your market reach by targeting new customer segments or entering new geographical areas to increase sales. Invest in aggressive advertising and promotional activities to build brand loyalty and capture a larger share of the market. Consider partnerships or collaborations to gain access to new distribution channels and reach a wider audience.

Cost Reduction

In the maturity stage, streamline production processes and cut operational costs to maintain profitability despite market saturation and increased competition. Explore opportunities for economies of scale, negotiate better supplier deals, and optimize your supply chain. This cost-efficiency can allow you to lower prices or maintain competitive pricing, ensuring customer retention.

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Product Diversification

During the decline stage, consider offering new variations or complementary products to appeal to loyal customers and extend the product’s life. Identify emerging trends or consumer preferences and adapt your product offerings accordingly. Additionally, explore international markets or niche segments where the product might still have demand. This diversification can help maximize revenue and mitigate the effects of decline.

Examples of Product Life Cycle

Let’s explore four examples of products’ life cycles, and outline the five stages of introduction, growth, maturity, saturation, and decline for each:

Nokia Mobile Phones

• Introduction (1980s-1990s): Nokia entered the mobile phone market during the 1980s. Their early models, like the Nokia Mobira Talkman, were bulky and expensive, catering to a niche market. However, they paved the way for more portable devices.
• Growth (Late 1990s-2000s): Nokia experienced rapid growth in the late 1990s and early 2000s with iconic phones like the Nokia 3310 and 5110. These durable, user-friendly devices became immensely popular worldwide, dominating the mobile phone market.
• Maturity (Early 2000s-mid 2000s): Nokia reached its peak with smartphones like the Nokia N95. They had a strong presence in both developed and emerging markets. However, competition increased from companies like Apple and Samsung.
• Saturation (Mid 2000s – late 2000s): The mobile phone market became saturated as more players entered. Nokia faced challenges in adapting to touch-screen smartphones and app ecosystems, which hindered its growth.
• Decline (Late 2000s-present): Nokia’s decline began in the late 2000s due to its inability to compete effectively with Android and iOS devices. In 2014, Nokia’s Devices and Services division was acquired by Microsoft. Nokia has since made a comeback with a focus on telecommunications infrastructure.

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Typewriters

• Introduction (Late 19th Century): The typewriter was introduced in the late 19th century, revolutionizing written communication. Initially, they were bulky and mainly used in offices for typing documents.
• Growth (Early to Mid-20th Century): Typewriters saw significant growth during the early to mid-20th century. They became essential tools for businesses, professionals, and writers, leading to various innovations and models.
• Maturity (Mid-20th Century): Typewriters reached maturity with standardized designs and widespread adoption across offices. Iconic models like the IBM Selectric became staples in workplaces.
• Saturation (Late 20th Century): By the late 20th century, the market for typewriters became saturated as digital technology emerged. Computers and word processors started replacing typewriters in offices.
• Decline (Late 20th Century-present): Typewriters experienced a rapid decline as digital word processing became the norm. Today, they are considered obsolete, with only niche collectors and enthusiasts maintaining their use.

Kodak Film Cameras

• Introduction (Late 19th Century): Kodak introduced its first film camera, the Kodak Camera, in the late 19th century, making photography more accessible to the public.
• Growth (Early to Mid-20th Century): Film cameras by Kodak, like the Brownie series, gained popularity during the early to mid-20th century. They dominated the consumer photography market.
• Maturity (Mid-20th Century): Kodak maintained its market leadership with iconic cameras such as the Kodak Instamatic. They also excelled in film production.
• Saturation (Late 20th Century): With the digital camera revolution in the late 20th century, Kodak’s film camera business faced saturation. Digital cameras offered more convenience.
• Decline (Late 20th Century-present): Kodak’s film camera business rapidly declined in the digital age. They filed for bankruptcy in 2012 and shifted their focus to other imaging technologies.

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Blackberry Smartphones

• Introduction (Early 2000s): Blackberry introduced its first smartphone in the early 2000s, targeting business professionals with secure email and messaging features.
• Growth (Mid-2000s): Blackberry experienced growth during the mid-2000s, becoming popular for its physical QWERTY keyboards and corporate-friendly services.
• Maturity (Late 2000s-early 2010s): Blackberry devices matured in the late 2000s, but faced competition from iPhones and Android devices. Attempts to adapt to touch-screen smartphones were challenging.
• Saturation (Early to mid-2010s): Blackberry’s market share declined as iPhones and Android phones dominated. The company struggled to innovate and adapt to changing consumer preferences.
• Decline (Late 2010s-present): Blackberry’s decline continued, leading to a shift away from hardware production. They refocused on software and security services.

These examples demonstrate the varying trajectories products can follow throughout their life cycles, influenced by technological advancements, market dynamics, and consumer preferences.

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Product Life Cycle (PLC) FAQs