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Understanding Product Life Cycle Management

Product life-cycle management (PLCM) involves strategies used by businesses as a product moves through different stages. The goals of PLCM are to reduce costs and time to market while improving quality and identifying sales opportunities. The main stages are market introduction, growth, maturity, and decline. Each stage is characterized by different levels of costs, sales, competition, and profits. Identifying what stage a product is in can be difficult, especially when transitioning between stages.

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72 views2 pages

Understanding Product Life Cycle Management

Product life-cycle management (PLCM) involves strategies used by businesses as a product moves through different stages. The goals of PLCM are to reduce costs and time to market while improving quality and identifying sales opportunities. The main stages are market introduction, growth, maturity, and decline. Each stage is characterized by different levels of costs, sales, competition, and profits. Identifying what stage a product is in can be difficult, especially when transitioning between stages.

Uploaded by

vikramviv
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We take content rights seriously. If you suspect this is your content, claim it here.
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Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its

life cycle. Goals The goals of PLC management are to reduce time to market, improve product quality, reduce prototyping costs, identify potential sales opportunities and revenue contributions, and reduce environmental impacts at end-of-life. Characteristics of PLC stages The four main stages of a product's life cycle and the accompanying characteristics are Stage 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. Characteristics costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market

1. Market introduction stage

2. Growth stage

3. Maturity stage

6. increased competition leads to price decreases 1. costs are lowered as a result of production volumes increasing and experience curve effects 2. sales volume peaks and market saturation is reached 3. increase in competitors entering the market 4. prices tend to drop due to the proliferation of competing products 5. brand differentiation and feature diversification is emphasized to maintain or increase market share 6. 1. 2. 3. 4. Industrial profits go down costs become counter-optimal sales volume decline prices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales

4. Saturation and decline stage

Note: Product termination is usually not the end of the business cycle,

only the end of a single entrant within the larger scope of an on-going business program. Identifying PLC stages Identifying the stage of a product is an art more than a science, but it's possible to find patterns in the some of general product features at each stage. Identifying product stages when the product is in transition is very difficult. Identifying Features Introduction Sales Low Investment Very High Cost Low or no Competition competition Advertising Very High Profit Low Stages Growth High High(Lower than intro stage) High High High

Maturity Decline High Low Low Low

Very High Low High High Low Low

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