Product Life Cycle (PLC) Flashcards
1
Q
What is the PLC?
A
- The demand for a G&S can never last forever
- The PLC describes the changes in consumer demand of a G&S over time
- The PLC helps marketers determine how to promote their G&S
2
Q
3 Phases:
A
- Introduction
- Maturity
- Decline
3
Q
Introduction Phase
A
- Launch of a new G&S is very expensive (design costs, training personnel, advertising, distribution, packaging etc)
- Thus, the initial price of a product when it enters the market is usually very high
- Early adopters: adventurous consumers who like to be first to own new products
- Example: DVD players cost $600 in 1997
4
Q
Maturity Phase
A
- Sales growth slows → profits remain
- Costs have been recovered for research, production, distribution, sales and advertising.
- Market is full of competitors, market share is stable, and the price of products is low.
- Examples: toilet paper, ketchup, milk, fridge
5
Q
Decline Phase
A
- Sales and profits begin to decrease
- Marketers try to adjust/improve/modify products or reduce price to reverse decline (add features).
- Eventually the product is removed from the market.
6
Q
Fad:
A
A product or service that is VERY popular for a SHORT time, and then disappears (i.e. Rubik’s Cubes, Pokemon Cards)
7
Q
Trend
A
- more lasting effect on the market than a fad
- Ex: move towards healthier lifestyles, Reality TV
8
Q
Niche Market
A
- Firms that control and dominate a very small, specific section of the market
- Ex: Pet Hotel
9
Q
Seasonal Market
A
- G&S only popular during particular seasons
- Ex: ice cream → summer OR skiing → winter
