Q. Explain the concept of Product Life Cycle (PLC). Pickup any product/brand of your choice in the recent past where the marketing mix element have changed during the different stages of the PLC. List out all the changes that have occurred during its PLC.
Understanding
the Product Life Cycle (PLC)
The Product Life
Cycle (PLC) refers to the stages a product goes through from its inception to
its eventual decline in the market. The concept of PLC is crucial in marketing
as it helps businesses understand and anticipate changes in sales,
profitability, and consumer behavior at various points in the product’s life.
It enables marketers to adjust their strategies for product development,
promotion, pricing, and distribution according to the product’s stage.
1.
Introduction
Stage:
o This is the
product's launch phase. At this point, the product is new to the market, and
awareness among consumers is low. The main focus is on creating awareness and
convincing potential customers of the product’s value.
o Marketing
strategies typically focus on heavy promotion, distribution channel
development, and pricing strategies that might either be skimming (high initial
price) or penetration (low initial price to attract customers).
2.
Growth
Stage:
o The product begins
to gain traction, and sales grow rapidly. More customers become aware of and
adopt the product.
o The focus shifts
to differentiating the product from competitors, expanding distribution
channels, and increasing market share. As sales grow, competition begins to
increase, leading to new product versions, upgrades, or adaptations.
3.
Maturity
Stage:
o This is the peak
of the product’s success. Sales growth slows as the market becomes saturated.
The product has reached a large proportion of the potential market, and
competition is intense.
o Marketing
strategies during this stage are focused on maintaining market share through
promotional offers, pricing strategies, and slight product modifications.
Cost-cutting and efficiency are important, as profit margins may begin to
narrow.
4.
Decline
Stage:
o In this stage,
sales and profits begin to fall. This decline can be attributed to market
saturation, technological advancements, changing consumer preferences, or the
introduction of superior products.
o Companies may
decide to discontinue the product, reduce its price to clear out inventory, or
try to rejuvenate it through modifications. Marketing efforts are often reduced
in the decline stage.
Each stage of the
PLC requires specific strategies in terms of marketing mix—product, price,
place, and promotion (often referred to as the 4 Ps). Now let’s explore how
these elements change across different stages of the PLC with an example.
Example: The
Apple iPhone
The Apple iPhone
is a prime example of a product that has gone through multiple stages of the
Product Life Cycle since its debut in 2007. The iPhone has undergone numerous
changes in terms of marketing mix elements over the years, adjusting its
strategies to match the evolving stages of the PLC.
1.
Introduction Stage (2007-2008)
When Apple first
launched the iPhone in 2007, it was a completely new product in the market. It
introduced a combination of features—touchscreen, internet connectivity, and an
iPod-like music player—into a single device. The marketing mix at this stage
was as follows:
Product:
- The
iPhone was revolutionary, with a unique design and features that set it
apart from other mobile phones.
- The
product itself was initially available in limited models with 4GB and 8GB
storage options.
- It
focused heavily on its unique touchscreen interface, integrating the
phone, media player, and internet capabilities into one device.
Price:
- Apple
adopted a skimming pricing strategy, with the iPhone
priced relatively high. The initial price was around $499 for the 4GB
model, which positioned the iPhone as a premium product.
- This
high price aimed to capture early adopters willing to pay for the latest
technology.
Place:
- Initially,
the iPhone was available exclusively through AT&T (in the U.S.) and
Apple retail stores, limiting its availability.
- Apple
relied on exclusive distribution to build demand and maintain control over
pricing and positioning.
Promotion:
- Apple
focused on creating hype and exclusivity, using minimal but highly
effective advertising and PR campaigns.
- The
company relied heavily on Steve Jobs’ product announcements, which were
designed to create excitement and anticipation among consumers.
- Initial
promotions were focused on showcasing the iPhone’s unique features, such
as the touchscreen, internet capabilities, and integration of iPod
functionalities.
2.
Growth Stage (2009-2013)
As the iPhone
gained popularity and more people started adopting smartphones, it entered the
growth stage. Sales soared as competitors started to notice the iPhone’s
success, and Apple introduced new models with enhanced features.
Product:
- Apple
launched newer models, such as the iPhone 3G (2008), iPhone 4 (2010), and
iPhone 5 (2012), each with improvements in performance, design, and
features.
- The
product now included better cameras, faster processors, and larger
screens, keeping it relevant and competitive in the market.
- Apple
also introduced the App Store, significantly expanding the iPhone’s
capabilities and creating a larger ecosystem of applications.
Price:
- Apple
lowered prices slightly for the older models as newer versions were
introduced, using a penetration pricing strategy for the
earlier iPhone models to attract more customers.
- The
introduction of different models (e.g., iPhone 4, iPhone 5) at different
price points helped Apple appeal to a broader audience, including
budget-conscious consumers.
Place:
- Distribution
channels expanded significantly. The iPhone was now available through
multiple carriers in the U.S. (Verizon, T-Mobile, Sprint) and globally.
- Apple’s
own retail stores and online channels became key parts of the distribution
strategy, alongside third-party retailers like Best Buy.
Promotion:
- Marketing
efforts expanded beyond the initial hype and exclusivity approach. Apple
focused on showcasing the iPhone’s diverse features through
advertisements, billboards, and media campaigns.
- Apple
emphasized the iPhone’s performance, app ecosystem, and integration with
other Apple products like iTunes and iCloud.
- The
company started highlighting the brand’s lifestyle appeal, targeting both
professionals and younger consumers.
3.
Maturity Stage (2014-Present)
By 2014, the
iPhone had become a household name, and its growth began to slow down as the
market became saturated. However, Apple managed to maintain its dominance in
the smartphone market through product innovation and strategic marketing.
Product:
- Apple
continued to introduce incremental product improvements with the iPhone 6,
iPhone 7, iPhone X, and more recently the iPhone 13 series.
- Features
like better cameras, facial recognition, wireless charging, and improved
battery life were introduced to maintain interest.
- The
iPhone’s design also underwent some changes, including larger screens with
the iPhone 6 and the removal of the home button with the iPhone X.
- Apple
started focusing on product differentiation through premium models, such
as the iPhone Pro versions, offering advanced features at a higher price
point.
Price:
- Apple
maintained its premium pricing strategy but introduced variations in
pricing with different models (e.g., iPhone SE for budget-conscious
consumers).
- Promotional
pricing was occasionally offered for older models, but the flagship models
remained at high price points to reinforce the brand’s premium
positioning.
Place:
- The
iPhone is now available through a wide range of channels globally,
including all major carriers, Apple’s retail stores, e-commerce platforms,
and third-party retailers.
- Apple
continued to expand its online presence, with the Apple Store and
direct-to-consumer digital channels becoming major points of sale.
Promotion:
- Promotional
strategies included heavy advertising campaigns, social media engagement,
and influencer partnerships.
- Apple
focused on the unique selling points of the iPhone, such as privacy, security,
and the ecosystem of Apple products (MacBook, iPad, Apple Watch).
- Apple's
advertising emphasized lifestyle and aspirational imagery, showcasing how
the iPhone was integrated into everyday life.
4.
Decline Stage (The Future)
The iPhone has not
yet entered the decline stage, but there are signs that its dominance in the
smartphone market may begin to wane as new technologies emerge. Here are the
potential future changes:
Product:
- Apple
may continue to innovate, possibly by introducing new form factors (e.g.,
foldable phones) or focusing more heavily on new features like augmented
reality (AR).
- There
could be a shift to wearables or other devices integrated with the iPhone,
reducing the focus on traditional smartphones.
Price:
- As
competition intensifies, Apple may have to reduce prices to maintain its
market share, especially in emerging markets.
- However,
it’s likely that Apple will maintain premium pricing for its flagship
models while offering lower-priced alternatives.
Place:
- Apple
may explore new distribution channels, focusing more on digital services,
subscription models (e.g., iCloud, Apple Music), and cross-platform
integration.
- Retail
stores could shift towards showcasing the entire Apple ecosystem, with
less emphasis on selling individual iPhones.
Promotion:
- Apple
might shift its promotional efforts to emphasize its ecosystem of products
and services, highlighting how all Apple devices work seamlessly together.
- Promotional
efforts may focus more on long-term customer relationships, encouraging
upgrades and loyalty rather than just driving immediate sales.
Conclusion:
Evolution of the iPhone through the PLC
Throughout its
life cycle, the iPhone has undergone significant changes across all elements of
the marketing mix. Initially, it was positioned as a groundbreaking product
with a high price, limited distribution, and exclusive promotional strategies.
As the iPhone entered the growth stage, Apple adapted its pricing, expanded its
distribution, and focused more on differentiation. By the maturity stage, the
iPhone became a dominant player in the market, with incremental improvements
and sophisticated promotional campaigns.
Looking forward,
the iPhone may face challenges as it enters the decline stage, but Apple’s
focus on innovation, pricing, and integration with its broader ecosystem
suggests that the iPhone will continue to adapt and evolve in response to
changing market dynamics.
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