Product Life Cycle In Marketing

Product life cycle (PLC) describes that a new product has to undergo a sequence of stages. Applying PLC concept help to develop good marketing strategies for different stages of the cycle (Kotler, 2002). Product life cycle is a useful framework that being used widely by marketers to describe the relationship between the products and the markets. It is argued that all products have a life cycle and it works similar with the human beings. Using the same human analogy, products are born, develop and grow through childhood, adolescence, adulthood, old age and then decline and then eventually die. It assumes that product and process innovation are inextricably linked and that firms will not attend to the production process until product innovation

The objective of promoting the products during market introduction is informing and begin to build primary demand if the product is a brand new that never existed in the market before. At this stage, firms experiencing low sales as the customers are waiting to be persuaded and price is high as the product is new as a result of high research and development costs that need to be recuperated. The marketing objective for the company of this stage is to create awareness and stimulate trial which cause the initial purchase of a product by a consumer. Besides, firms do not have profits or positive cash flow but on the other hand, firms need to spend large amount of capital in advertising the product vigorously and promoted it to gain market share. Companies spend heavily on advertising in this stage to stimulate primary demand, which is more focus on the aspiration for the product range rather than for a specific label, since there are only few competitors with the same products. Competition is minimal or nil as the new product launched should have the advantage of surprise. There may be few potential innovators during the introduction stage who are doing personal sales. As a result, price-skimming strategy is utilized by innovators to regain the costs that have spent on product development and marketing costs (Wong Hiu Kan and Paul D. Ellis, 2007). As more competitors dispatch and present their own products and the product progresses along its life cycle, not only company attention on creating selective demand become the company focus, but as well as the preference to become a specific brand. In order to find good channel members, salespeople are needed by firms to convince the others to buy the new products. In order to get the interests of salespeople or channel members to sell new product, sales promotion may be targeted at them. Besides, sales promotion also encourage customers to give a try on the new