PRODUCT LIFE CYCLE

PRODUCT LIFE CYCLE

Just as living organisms have life to exist and die within a given range time of its existence, so also is a product that is being produced and sold out in the market place, been created (produced) at a given time and becomes obsolete at a given time and becomes obsolete at a particular time or when it loses fashion.

Datong C.D et al (2003) describes the product life cycle as “an attempt to identify the stages in the sales history of the product”. He also described how a product sales position and profitability is expected to vary over given period of time.

In each of the stages of product life cycle, there are defined opportunities and problems with respect to profit potential of the product and their possible marketing strategy.

Kotler Philips (1999), in his suggestion; maintained that “better marketing plans can be formulated when the stage that a product is in and/ or the one it may be heading towards is being identified”.

STAGES OF PRODUCT LIFE CYCLE

Five stages of the product life cycle as also identified by others authors such as; Thompson and Noordewier (1992) and schema et al (1995) identified only four stages of the product life cycle.

But for the purpose of giving a more elaborate idea about such life history of a product, that of Kotler Philips has been defined suitable for this research work; other authors excluded the saturation stage.

1) STAGE 1: PRODUCT INDUCTORY DEVELOPMENT STAGE (INFANCY)

Kotler maintained that, this stage begins when the company finds and develops a new product idea.

During this product development and introductory stage, sales level grows slow, profit are non-existent in this stage because of the heavy expenses that is required for introducing more on promotion of the product, this might include selling the product at no cost.

Development of strategy for this stage; may include:

1. Intensify promotional activities due to the product is new in the market and need to invest much funds in advertisement.
2. Maintain/ improve product quality
3. Product packaging must be enhanced
4. Distribution networks need to be explored for sales and distribution of product.

2) STAGE 2: GROWTH STAGE
This is a period of rapid market acceptance and increasing profit. If the new product satisfies the market, sales will start climbing substantially. In this stage new competitors enter the market attracted by the promise of large- scale production and profit.

A firm tries to sustain market growth for as long as possible by undertaking to improve product quality and vigorously searching for new market segment to capture.

Strategy to be developed for the growth stage; includes:

1. Increased in promotional activities
2. Expansion of distribution networks
3. Maintenance of price level
4. Maintenance of product quality due to too many producers in the same line of business/ production.
5. Product segmentation into smaller units.

3) STAGE 3: MATURITY STAGE
This is the stage or a period of continuous sales growth, increased profits due to maintenance of quality and sales, increase in promotional expenses.
Strategies development for the maturity stage; includes:
i) Maintain product quality
ii) Improve quality through research and development
iii) Maintain level/ reduce slight of price level
iv) Slight product modification
v) Maintenance of consumer goodwill.

4) STAGE 4: SATURATION STAGE
A stage in a product’s life cycle in which everyone who might want the product already has it. If a company is in this stage, then it could indicate that the company is not innovative or that competitors have been able to provide superior product offerings.

Typically, the company will cut down on sales and advertising expenditure, if it reaches this stage and may focus on the development of new products.

Strategies development for the saturation stage includes:
i) Heavy promotional activities
ii) Re – branding
iii) Re- packaging
iv) Modification of product
v) Reduced price – depending on the objectives of the organization.
vi) Diversification of the market
vii) Improve product quality

5) STAGE 5 DELINE STAGE
The last stage of the product life cycle; is the decline stage. This stage is clearly demonstrated by the fall in both sales and profits. Despite the obvious challenges of this stage, there may still be opportunities for manufactures to continue making profit from their product. Challenges of the stage include:

i) Market in decline, failing sales and profits, product withdrawal.
Benefits of this stage include; cheaper production and cheaper markets cost.
Strategies development for this stage; include:
i) Diversification of the business
ii) Re –packaging
iii) Re- modification.