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Product Lifecycle Planning
Certificate in Advanced Retailing and Store Operations
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TCS Business Domain Academy
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Certificate in Store operations and POS
Learning Objectives
To understand the product life cycle
Why product life cycle planning for retail business
Importance of product life cycle and its use as a tool to attract
more customers
Various strategies that can be implemented with the help of
product life cycle in a business
Certificate in Store operations and POS
Topics Covered
Introduction
Classification of products
Product Life Cycle (PLC)
Introduction stage and Strategies employed
Growth stage and strategies employed
Maturity stage and strategies employed
Decline stage and strategies employed
Different patterns
Trends in retail: PLC
Certificate in Store operations and POS
Introduction
The idea of product life cycle has been borrowed from biology
and an analogy is drawn with the life of an organism
A tool for forecasting and also for developing marketing strategy
The concept of product life cycle creates distinct stages in
product performance in market place as follows:
Introduction
Growth
Maturity
Saturation
Decline phase.
Certificate in Store operations and POS
Classification of products
Based on durability and tangibility a product is classified as:
Durable
Non durable
Services
Based on usage it can be further classified as:
Consumer products
Industrial products
Certificate in Store operations and POS
contd..
Consumer products can be further classified as
Convenience products
Shopping products
Specialty products
Unsought products
Industrial products can be classified as
Production goods
Support goods
Certificate in Store operations and POS
Introduction stage and strategies employed
The product is introduced to the customer
Introduction of new product is difficult because:
Only a few sellers can afford the technological know-how
Marketing
Other costs to launch the product
The risk of new product failure is quite high
Company needs to do the following:
Inform the customer about the product
Induce product trial
Secure distribution in retail outlets
Certificate in Store operations and POS
contd..
The following are the strategies that are employed during
introduction stage:
Rapid skimming
Slow skimming
Rapid penetration
Slow penetration
Certificate in Store operations and POS
Growth stage and strategies employed
Growth stage is crucial for the product’s survival
Reactions of the competitors to the product’s success will affect
the life expectancy
This stage is characterized by :
Increase in sales
Heavy demand for the product
A peak in the profits
Profit increases: Promotional costs are spread over a larger
volume
The unit manufacturing cost falls
Certificate in Store operations and POS
Contd..
Companies resort to aggressive pricing, including price cuts to
attract price sensitive customers.
They emphasize the product’s benefits in order to create a
competitive niche in the market.
Changes brought about to the product include making the
product available in different sizes, flavors, etc.
They may introduce new distribution channels
They enter new markets
Certificate in Store operations and POS
Maturity stage and strategies employed
Maturity stage is marked by a slow growth
Stability is achieved in terms of revenues for a particular
product.
Sales tend to grow, stabilize, and then start to decline
Competition is fierce at this stage as many brands compete at
the same time
Competitor tries to improve his product and highlight the
product benefits
Weaker competitors and smaller firms are squeezed out of the
market
Certificate in Store operations and POS
Contd..
Abandon weaker products and concentrate more on profitable
products.
Increase advertising and sales promotion.
Marketers resort to introducing fresh advertising campaigns,
new packaging styles
Product re-launches during this stage are common.
Invest more in R&D to bring about improvements in the product
Product line extensions.
Certificate in Store operations and POS
Decline stage and strategies employed
Sales and profits of all products and brands tend to decline
Some products experience a faster rate of decline while others
experience a slower decline rate
Reasons for sales decline could be:
Technological advances
Increase in competition
Shift in consumer’s tastes and preferences
This forces firms to withdraw from the market
Certificate in Store operations and POS
Contd..
Reducing the number of products in product line offered
Cutting promotional budgets and prices
Increase the firm’s investment to strengthen its competitive
position and dominate the market.
Maintain the firm’s investment level until the market uncertainty
passes by.
Selectively decrease the firm’s investment level by dropping the
unprofitable customer groups
Certificate in Store operations and POS
Different patterns
Growth-slump-maturity pattern
Cycle recycle pattern
Scalloped PLC
Certificate in Store operations and POS
Trends in retail: PLC
For any assortment the life of the product is entirely different
Based on the demand and supply of the product retailer will
have to place order to the manufacturer or the distributor
depending on the channel that exist
Retailer needs to take into account the short life cycle for
consumer non-durables
Selection of products that is to be placed within the store plays
a clear role as there are too many things on offer and retailers
have only limited space to cater.
Certificate in Store operations and POS
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Thank you
TCS Business Domain Academy