Just as people go through infancy, childhood, adulthood and old age, the products and brands also goes through the same. In simple terms the PLC describes the stages through which the products passes. As the product moves through the stages of the lifecycle, the 4P’S changes accordingly.
This is the 1st stage of PLC. During this phase, the product is newly launched in the market due to this there will be more advertising and promotional activities in order to raise awareness among the customers.
The price of the product can either be high in order to recover the cost quickly or it can be low to encourage adoption from the customers. It differs from company to company on how they set the price.
The revenue is mostly negative at this stage as the costs are high.
In this stage the revenue starts to flow in and the customers are more aware about the product in the market. The advertisement and promotional cost are lower as compared to the introduction stage. Due to this the pricing strategy now tends to be competitive pricing. Some more variants of the product can be made available in the market.
At this stage the pace of the revenue growth slows down. There will be little amount of profit that is generated by the product. The advertising and promotion focuses on reminding the customers about our product in the market. The company focuses on new product, changes in sizes, flavor change, etc. so that the customer purchase the product. Promotion is done to differentiate the product from the competition.
At this stage the product does not give the expected returns to the company. The sales figure goes down. The company starts to offer free products at lower price in order to finish the stocks. And finally the product is withdrawn from the market. Promotional expenses will be minimal.
Therefore there are 4 stages of PLC. There is no time limit of each stage and it depends upon many factors like demand of the customers, promotions, price, etc. If you have any questions feel free to ask me. And if you enjoy this video do like, comment, share and subscribe.
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