Product Life Cycle

PLC is the course that a product’s sales and profits take over its lifetime. The PLC has 5 distinct stages : 1. Product development. 2. Introduction 3. Growth 4. Maturity 5. Decline

Product Development: begins when the company finds and develops a new-product idea. During product development, sales are zero and the company’s investment cost mount. ( Note : Parity Product, White chocolate ).

Introduction : is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. Profit : - Sales : low. Promotion : High. Much effort to attract distributors.

Growth stage : - sales will start climbing quickly. - New competitors will enter the market. ( Komix vs Kalibex, Extra Joss vs Hemaviton Bubuk vs Kuku Bima Ginseng ). - Increase in the number of distribution outlets. - Promotion spending : high. - Profit : increase - Manufacturing cost : fall.

Maturity Stage : - Normally last longer than previous stages. - Most products are in the maturity stage. - Most of marketing management deals with mature products. - Product Managers should do more than ride along with mature products. - They should modify the market, product, and marketing mix.

E.g : - Rinso mencuci lebih bersih. - Rinso bisa membuat warna awet di samping mencuci lebih bersih. - Jangan takut kotor, bagi Rinso kotor tidak masalah.

E.g : Pepsodent : - Membuat gigi putih cemerlang - Pepsodent baru : merawat gigi dan gusi. - Sekarang : Pepsodent mencegah gigi berlubang.

E.g : Kijang : - Kijang “kaleng” ( 1982 ). - Perbaikan marketing mix : produk lebih bagus, harga makin naik, iklan untuk membentuk citra produk. - Ada Kijang bensin, ada Kijang disel. - Keluar Kijang Innova. - Harga lebih mahal dari Mercedes.

Decline stage : - a product’s sales decline.

Sales decline for many reasons : technological advances : pager, kertas karbon, computer – laptop – HP. Shift in consumer tastes Increased competition : market growth of the product vs industrial growth.

Management’s decision on the declining products : - maintain its brands in the hope that competitors will leave the industry, e.g : P&G maintained liquid soap business as others withdrew. Ways : doubling the size, changing the shape, etc.

- harvest the product, means : reducing various cost ( plant and equipment, maintenance, R&D, advertising, sales force, etc ) and hoping the sales hold up. - drop the product.