May 11, 2019
The PLC or Product Life Cycle
The PLC or Product Life Cycle is a marketing tool to manage and monitor a products or services life expectancy. It’s a financial trend analysis based over a period-of-time and measures a products or services sales, revenue and accrued expenses.
To estimate the life expectancy, marketing mangers use life cycle assumptions and analyze the four stages of introduction, growth, maturity, and decline.
- Introduction – is the launch stage when a product or service is brought to market. Larger investments are typically required to generate brand awareness.
- Growth – still requires significant marketing investments to continue increasing the products or services sales and revenues. During growth the company should begin to experience higher profits improving ROI.
- Maturity – is the stage when sales begin to level off. Competitors begin to force profit margins to decrease and to stimulate sales, companies aggressively use sales promotion incentives.
- Decline – is the final stage when demand decreases and the company must decide to discontinued the product or service or offered them as a lost liter to accommodate or compliment a company’s other product or service lines.