In this social media-dominated market, where no product ever stays evergreen in the minds of consumers, it is very important to monitor growth, peak and decline in trends.
This journey is called the Product Life Cycle (PLC). If you have been struggling to understand what a PLC is in marketing, we have got you covered.
It is an important concept that all marketing experts should know, as it helps businesses to see how their product is performing at different times.
Thus, it helps business owners find out what actions they should take to stay competitive in the market.
What is a Product Life Cycle in Marketing
A product life cycle in marketing indicates the stages that a product goes through from the first time it enters the market till it eventually leaves it, when a new product replaces it.
These stages in the product’s journey show the changes in sales patterns, profit differences, changes in customer interest and competition with rivals.
The key stages in PLC can be simply stated as –
- A business launches the product
- The demand and popularity of the product grow as people start buying more of it
- The product reaches a stable point of sales in the market
- With time, as more developed and affordable options enter the market, the product starts losing demand.
Understanding this cycle helps marketing experts determine when they can invest more in the promotion of the product, when it is time to make improvements, and when to discard it.
Importance of PLC in marketing
Understanding and using PLC in marketing strategies is important as it helps businesses make better decisions at the right time.
Rather than using the same marketing strategy for all product campaigns, using PLC allows marketers to change their approach based on the stage the product is in.
Some reasons why PLC is important are –
- Better planning: PLC helps marketing experts decide the kind of pricing, promotions and messaging that are needed at each stage.
- Smarter budgets: During growth stages, businesses can invest more and start saving up when the product starts losing demand.
- Managing competition: Knowing the PLC stage allows brands to respond more effectively to rivals.
- Supporting product improvement: PLC shows when a product needs to be further developed or enhanced, and indicates the need for rebranding.
- Useful for digital marketing strategies: A digital marketing agency in Ahmedabad would often use PLC to decide what kind of promotional campaigns need to be crafted for products, based on market response.
What are the Stages of PLC?
To fully understand the concept of PLC and to make effective use of it in your marketing campaigns, it is important to understand each stage in the cycle. There are four main stages in the PLC:
- Introduction stage: This is when a product enters the market for the first time. At this point, sales are low, profits are minimal or negative, and customers are still learning about the product, which means promotional costs are high.
- Growth stage: Here, the product slowly starts gaining popularity. Sales and profit increase, more competitors enter, and the customer trust grows.
- Maturity stage: At this point, sales peak, the market gains crowds, price competition starts, and profits start to slow down.
- Decline stage: By this time, customers start losing interest in the product. Sales decline with profits, and new products replace the old ones.
PLC marketing strategies
Different stages in the PLC need different marketing strategies for the product to do well. Here are some of the strategies you can use, based on each stage.
- Introduction stage: More promotional efforts, content marketing to create awareness, and limited-time launch offers with a focus on early adopters allow brands to gain a loyal customer base in the initial stage.
- Growth stage: Expanding marketing channels, performance marketing, and competitive pricing with a view to improving customer experience, draw in more profits during growth.
- Maturity stage: This is the time to invest in solid branding, offers and bundles, remarketing and retention campaigns, as well as paid advertisements.
- Decline stage: By the decline stage, fewer investments are smart. Minimal promotion, cautious advertising, product repositioning and planning a new replacement are the most profitable at this stage.
Conclusion
PLC is a powerful concept that marketers use to understand consumer response to products over time.
Knowing the different stages in the PLC allows businesses to plan their campaigns better, aligning marketing efforts with the product’s life cycle.
This saves costs and allows the brand to stay competitive in the long run.
FAQs
1. What is the idea behind PLC?
PLC stands for product life cycle, which describes the different stages a product goes through in the market, from introduction and growth to maturity and decline. It helps marketers plan the right strategies at the right time.
2. Why is PLC important in marketing?
Product life cycle is important in marketing as it helps businesses understand when to invest in promotions, when to improve the product and when to reduce marketing spend. It allows businesses to plan better, control costs and get higher returns.
3. Do all products have the same life cycle?
Not all products necessarily follow the same life cycle. Some grow and decline fast, while others gain more longevity. However, most pass through the four basic PLC stages.