When to Use the Product Life Cycle
- Establishing Competitive Advantage: If you are going to introduce a brand new killer application, comprehension of the PLC will enable you to stage the entry. With proper marketing campaigns, you will be able to convey that your new product shakes the market or provides a big improvement over the previous offerings.
- Developing a Winning Price Strategy: PLC plays an important role in the determination of the appropriate prices. You could probably give introductory premium pricing a thought, should you be in the introduction stage to recover development costs and position the product as high-end. When the product enters the growth stage and begins to meet stiff competition, you could use competition or competitive pricing strategies. Finally, during maturity, you may cut prices or use bundled offerings as effective tactics.
- Developing a Targeted Marketing Approach: The PLC will dictate what you say in marketing and to whom with your marketing. In the introduction stage, you’ll primarily be looking to increase brand awareness and aid in educating potential customers on your product’s value. During the growth stage, it may switch to building brand loyalty in existing markets, or secure the same in new markets. Maturity often focuses on maintaining share and fending off competition.
- React Proactively Before Decline: The PLC framework helps you to anticipate the decline of a product and to act in response proactively. You can look toward products’ innovation, trying to find new markets to expand into or looking to phase out a product for the introduction of new products.
Understanding the PLC and its different stages businesses can make educated decisions regarding optimization of the marketing mix (product, price, place, and promotion), strategic resource allocation towards high-growth products, and the opportunities to develop new products in order to extend the life cycle of a product.
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