- Informed Decision-Making: The PLC model guides business decisions in the most effective way. If a company knows exactly where its product line falls within the PLC (whether at introduction, growth, maturity, or decline), then it allows for more specifically targeted marketing strategies, prices, and resource planning. For example, during the introduction stage, heavy marketing efforts might be called for brand recognition, while in the maturity stage, the efforts can be diverted to cost-effectiveness and brand differentiation.
- Improved Sales Forecasting: With the help of the historical sales data and industry trend analysis from the perspective of the PLC, businesses can make better sales extrapolation and eventually estimation. This helps inventory management, production scheduling, and resource allocation. For example, forecasting low sales during the decline stage would help decide a company whether or not to invest in product innovation or phase out the offering.
- Strategic Resource Allocation: The PLC assists businesses in resource allocation across their product portfolio. During the introduction and growth stages, resources might be directed towards marketing and sales to fuel product adoption. As a product reaches maturity, resources might shift towards customer service and production efficiency.
- Product Innovation and Development: Understanding the PLC can help businesses identify opportunities for product innovation and development. As a product hits maturity and competition begins to intensify, this product life cycle structure could trigger an examination of feature additions, product improvements, even new product lines in the efforts to hold onto market share.
- Profit Maximization: Businesses that strategically adjust to each PLC stage will keep their product going in order to maximize their profits. Some measures may include cost cuts during the maturity phase or product modifications in order to explore new markets during the declining phase.
Product Life Cycle (PLC) | Stages and Case Study of Apple
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