What is product life cycle? Stage-by-stage marketing strategy from introduction to decline
- The product life cycle is the concept that a product goes through introduction, growth, maturity, and decline stages before it enters the market and disappears.
- As sales and competitive situations differ at each stage, the combination of the 4P marketing mix must also change.
- The term marketing mix was popularized by Neil Borden and later summarized by McCarthy into the 4Ps.
Contents
Product Life Cycle (PLC) is the concept that just as people are born, grow, and age, products also go through a process of increasing sales after they first appear on the market, then peaking, and then decreasing. It is usually divided into four stages: introduction, growth, maturity, and decline, and the appropriate marketing strategy varies for each stage.
Because it is a content that comes up along with the 4Ps in the marketing principles exam, I organized the origin of the marketing mix concept with a focus on step-by-step strategies.
Where did the marketing mix originate?
The term marketing mix became widely known after Harvard University professor Neil Borden used it in his lectures and articles. He said he got the idea from a colleague, Culliton, who compared a marketing manager to someone mixing ingredients. The various elements suggested by Borden took their current form in 1960 when Jerome McCarthy briefly summarized them into the 4Ps of Product, Price, Place, and Promotion.
In other words, marketing mix is an idea of how to combine various means according to the target market, and the combination should vary depending on what stage the product is in.
What should I do during the introduction and growth period?
In the introduction phase, sales are low due to few people knowing about the product, and profits are often unprofitable due to development and advertising costs. So, we focus on promoting the product to make it known and used, and choose to set the price low to quickly expand the market and high to recover the initial cost.
During the growth phase, sales increase rapidly and competitors begin to enter. We supplement product functions or increase the variety, expand the distribution network, and change the direction of advertising from 'try it' to 'choose our brand'.
용어 옆에 짧은 예시를 같이 적어 두면 시험 때 금방 떠오르더라고요. 색깔 펜은 두세 가지만 정해서 쓰는 게 오히려 깔끔한 것 같아요.
What is different between maturity and decline?
Maturity is the period when sales stop increasing and competition is the fiercest. Strategies are used to find new customer bases, propose new uses, or change design and services to differentiate. This is the stage where many products stay the longest, so strategy during this period is especially important.
During the decline, both sales and profits decrease. Depending on the situation, choose between a withdrawal strategy, which involves reaping remaining profits and reducing investments and exiting the market, and a residual strategy, which minimizes costs and holds on to loyal customers.
How to determine the stage?
What stage a product is at is determined by looking at the speed of sales growth, the number of competitors, and the level of price competition. However, not all products go through four stages like in textbooks, and in some cases, they grow again through renewal or end briefly like a fad. So, companies use tools such as SWOT analysis to examine the market situation and adjust their strategies.
How should I use the assignment?
The report has a clear flow if it is written in the following order: background of the marketing mix concept → contents of the 4Ps → stages of the product life cycle → 4P strategies for each stage → analysis of actual product cases. Create step-by-step strategies in a table so you can compare sales, profits, competition, and 4P strategies line by line to see them at a glance. Please indicate the source and year of sales data for example products. summarizes the background of Borden's marketing mix concept, the 4P mix, strategies for each product life cycle, and withdrawal/retention strategies on page 3. href="https://campusdown.com/product/Borden%EC%9D%B4%EC%A3%BC%EC%9E%A5%ED%95%9 C%EB%A7%88%EC%BC%80%ED%8C%85%EB%AF%B9%EC%8A%A4%EA%B0%9C%EB%85%90%EC%9D%98%EB%B0 %B0%EA%B2%BD%EA%B3%BC4P%EB%AF%B9%EC%8A%A4,%EC%A0%9C%ED%92%88%EC%88%98%EB%AA%85 %EC%A3%BC%EA%B8%B0%EB%B3%84%EB%A7%88%EC%BC%80%ED%8C%85%EC%A0%84%EB%9E%B5-25944" rel="noopener">Campus-like marketing mix and product life cycle materials can be a reference for those who want to organize the origins of concepts and strategies while preparing for a marketing theory test or assignment.
FAQ
What is product life cycle?
The concept is that a product goes through an introduction, growth, maturity, and decline period before it enters the market and disappears.
Who first wrote the marketing mix?
Harvard University's Neil Borden made it widely known, and McCarthy later organized it into the 4Ps.
What strategies do you use during maturity?
We use strategies such as discovering new customer bases, suggesting new uses, and differentiating design and services.
What are the decline strategies?
There is a withdrawal strategy that reduces investment and exits the market, and a residual strategy that protects remaining demand by reducing costs.