A product development passes through a sequence of stages, such as introduction, growth, maturity, and decline. The sequence is also called Product Life Cycle (PLC). The PLC influences the marketing strategy and marketing mix of an organization. The four stages of PLC are categorized on the basis of revenue generated by the product. This concept can be applied to brand or a category of product. The durations of the stages may vary from few days to several years.
PLC involves some marketing mix strategies, which can be better explained with the help of the four Ps of marketing.
The brief explanation of these four Ps is as follows:
i. Product:
It includes goods and services offered to the customers by producers. In simple words, product implies what a seller sells and what a buyer buys. It is the most visible element of marketing. Product includes the decisions about various factors, such as product design, features, sizes, quality, and packaging.
ii. Price:
It implies the amount given by a buyer to a seller to get a product or service. The price strategy involves decisions about selling price, discounts, and credit limits. The factors deciding price are the organization’s objectives, costs, competition, and customer demands.
iii. Place:
It involves a decision about the location of the product from where it can be purchased. It focuses on the distribution of product to end users by an organization. Every marketer aims at finding the best distribution channel for its product.
iv. Promotion:
It involves the use of communication tools to increase the awareness of customers about the product. The tools of promotion include advertising, sales promotion, direct marketing, public relations, and sales force. These tools inform customers about the product and persuade them to buy it.
The marketing mix strategies used in different stages of PLC are discussed as follows:
1. Introduction:
It involves a stage where an organization wants to create product awareness among customers to develop a market for the product.
The following are the strategies of 4Ps used in the introduction stage of life cycle analysis of the organization:
i. Product Strategy:
It includes the branding of the product and setting the standard for its quality level. The product is often patented and trademarked to protect it from illegitimate use.
ii. Pricing Strategy:
It focuses on keeping the price of the product low to create its demand in the market.
iii. Distribution Strategy:
It focuses on selecting the best distribution channel to target potential customers.
iv. Promotion Strategy:
It aims at the customers who wish to experiment with the new product.
2. Growth:
It refers to a stage where the organization concentrates on building brand preference and increasing market share.
The growth stage involves following marketing strategies related to 4Ps:
i. Product Strategy:
It includes additional features and services to the product to keep it in tune with the latest technology.
ii. Pricing Strategy:
It maintains the demand by stabilizing the price or giving discounts to customers.
iii. Distribution Strategy:
It includes the addition of distribution channels for the timely delivery of the product as demand increases.
iv. Promotion Strategy:
It aims at increasing the targeted customer base.
3. Maturity:
It involved a stage where growth rate in sales decreases.
The marketing mix strategies related to maturity stage are as follows:
i. Product Strategy:
It includes the enhanced product features that are modified to a larger extent to create differentiation from the competitor’s products.
ii. Pricing Strategy:
It involves the lowering of prices to maintain market share and face new competition.
iii. Distribution Strategy:
It includes a strategy through which a product should be made widely available to customers.
iv. Promotion Strategy:
It refers to the marketing of a product for making customers aware about the features and benefits of the product.
4. Decline:
It involves a stage in which an organization’s sales decline.
The marketing mix strategies related to decline stage are as follows:
i. Product Strategy:
It maintains the product by finding new uses and adding new features to the product
ii. Pricing Strategy:
It expands the product sale by lowering its price in the market and targeting the niche markets.
iii. Distribution Strategy:
It focuses on minimizing the cost by spending less on distribution channels.
iv. Promotion Strategy:
It focuses on giving heavy discounts to clear the stocks.