Challenges of Product Life Cycle
The product life cycle (PLC) presents a roadmap of the product from launch to decline. It has notable value but, while each stage is vital, overcoming specific challenges is present at each. The difficulties businesses face at each stage of the PLC:
1. Introduction Stage:
- Market Awareness: Introducing a new product in the product saturated market is challenging. A brand, as well as its offering, must create awareness through a marketing strategy.
- High Initial Costs: At this stage, most of the expenditure was induced through research, development, and the initial production runs for most companies. It is important to balance and cover these costs with pricing strategies.
- Limited Distribution: Retailers may be unwilling to stock the company products especially with unproven recognition. Creating goodwill is one steep mountain.
2. Growth Stage:
- Company up with Demand: Businesses are faced with the challenge of scaling production to meet the overwhelming surge in demand from potential customers.
- Managing Rapid Growth: Rapid growth also comes with a price, a price that the internal resources have a hard time coping with. In recruiting as well as training hired staff, stock keeping, and quality control.
- Competition: The success of the developed product attracts competition into the prospective market. The next frontier is to differentiate the product with its brand, innovation, and customer service.
3. Maturity Stage:
- Slow Sales Growth: Given a market that is beginning with a slowdown in market opportunities, it becomes increasingly saturated. Businesses must find ways to stall the maturity stage for long enough through means of product improvements, launching new marketing campaigns, or even penetrating a new market segment.
- Cost Pressures: Companies find a case presented by the increase in competition, where it is most likely a price war. One must be wary of different prices, and the product offers can sometimes be equal for different prices.
- Innovation Fatigue: Customers get used to the product and want it different. A business has to innovate to remain relevant.
4. Decline Stage:
- Falling profits: Sales and profits continue to erode, making it hard to continue investment in the product.
- Reducing cost: there is a need to look for cost channels into production or even outsourcing.
- Product Cannibalization: The entry of new products might end up eating into the market that the degenerating product was previously enjoying. Proper planning and positioning are required to avoid this.
These challenges can be prevented and strategies to handle them worked out in advance, thus optimizing the product life cycle for profitability.
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