Product Life Cycle (PLC) is a description of a products life in the market in relation to commercial costs and sales measures. It is associated with marketing and management decisions within a business. A business specializing in production of mobile phones will undergo five stages for the mobile phone’s life cycle.
This stage involves the development of the phone and testing its effectiveness. Research will be carried on the development and manufacturing of the phone. Ideas are brought together in designing the product and after its manufactured, it’s taken through various tests to test its effectiveness.
After the phone has been developed, it has to be introduced to the market and create its awareness. Marketing must target potential customers. At this stage, the intellectual property rights protection of the product must be obtained. The product pricing must be able to cater all the costs accrued in the development stage.
This stage comes after the phone product has been accepted by customers in the market. After the acceptance, the business will strive to increase its market share. Marketing at this point targets at a broader audience.
At this stage, the sales of the phone levels off. As competition increases, there is need to enhance the product features so as to maintain the market share. Production costs also decline due to efficiency in the manufacturing process.
At this point the market is in saturation of the phone product as completion also increases. Customer needs, tastes and preferences also tend to change. The business will be open to several options that include discontinuing the product or finding new uses of the product.
Importance of PLC to A Business
Managing the product life cycle of the phone product provides incredibly helpful insights. The model provides the source of truth for managing all aspects of the product.
The PLC concept is a forecasting tool that alerts managers on the possibility of saturation and decline of the product.
The model as well creates an extended lifetime of the product as the business adapts an approach in moving through the cycle.
The cycle as well provides a basis for describing the typical progress of marketing strategy over the phases of product life cycle.