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What is the importance of the concept of the product lifecycle for business planning and budgeting Assignment


The lifecycle of a product is very important for marketers as each stage needs to be managed in a different way. After a period of development, the product is launched into the market. The introduction stage is marked by efforts to gain recognition and customers through raising the awareness and trying to differentiate the product. Once the product reached its growth stage, marketers need to concentrate on product improvement and distribution to obtain a strong position in the market. When maturity stage is reached, the now established competitors put pressure on the marketers who need to concentrate on different strategies to maintain their market share and not have their product enter the decline stage and risk having to withdraw it from the market.

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The chart found below illustrates the close relationship between sales and promotional activity during the four stages of a product’s lifecycle.

2.Products in the introduction stage of PLC

Organically grown fruit and vegetables find themselves in the introduction stage. Due to the fact that UK consumers place importance on environmental protection and heath issues, marketers should concentrate more on raising customer awareness through sales promotions to stimulate demand and increase production volumes which can lead to the reduction of premium customer prices on these products.

BMW introduces the new family roadster, BMW Z4. It will be made available for purchase starting May 2009, but the promotional campaign has started in early December 2008, with press releases that show pictures of the new car and describe the innovative new features, that have not yet been seen in all 75 years of BMW roadster heritage.

When L’oreal launched its new Volume Shocking Exact Brush Mascara, in order to create trial and awareness, they offered 10000 free samples when you registered for an account on their website and extended their customer data base while encouraging people to try out their new product.

3.Products in the growth stage of PLC

Blue-Ray has been described as the next-generation optical disc format and is already in the growth stage of its lifecycle. The developers are maximising the market share by gaining support from all Hollywood studios and a large number of smaller studios and there already is a wide range of Blue-Ray related products such as players, recorders, drives and movies.

EasyJet Low-Cost flights are services that are still in the growth stage. Apart from the fact that there are still many different destinations and a few international markets they can target, EasyJet could concentrate on bettering their onboard services and develop a more personal customer service, which would give them an advantage over their competitors.

High Definition television sets are still in their growth stage. LG, aiming to maximise market share through brand building, launched a new HD television set LG60 HD in April 2008, through a unique campaign targeting customers who want to have it all and are willing to pay premium prices. The campaign aimed to show customers that their brand would offer more than standard entertainment through image quality; it will actually enhance the quality of life.

4.Products in the maturity stage of PLC

Ski Holidays offered by Neilson in early January are services in their maturity stage, as the service is seasonal. The competitive offerings will increase, therefore Nielson have to come up with new ways to differentiate their service like ski holidays targeting groups where each member can save up to �75 depending on the size of the group, or campaigns to gain new customer through existing ones by rewarding them with �50 for each mate they will bring along.

Vinyl recordings were in danger of entering the decline stage with the appearance of the CD.

The manufacturers found a way to extend the maturity stage of their product’s lifecycle by finding a niche market in the music industry: DJ’s were unable to use CD’s to apply their hands-on techniques. Another small market segment they addressed was ‘the collectors’.

Cherry Flavoured Cola was introduced to the market by Coca-Cola in 1985. In its maturity stage, it has intensive distribution channels and loyal customers. In 2007, in order to maintain the product in its current PLC stage, Coca-Cola targeted new market segments with the launch of a new campaign featuring Jay-Z (a worldwide known American hip-hop artist and businessman) as a spokesman, who was also involved in the design of the new bottle.

‘Friends’, the famous American television show, aired its last episode in May 2004, after 10 years of worldwide success. The producers are now getting profits from television reruns and DVD sales. In order to increase profits and sales of a product in a maturity stage, the producers culd invest into promotional campaigns like a 5 year reunion of the cast or target new markets and stimulate sales with existing customers by maybe producing a movie for the big screen.

Heinz Baked Beans is the most popular brand of baked beans in the UK market. Being in its maturity stage the producers decided to slightly modify the product in search for new market segments. In August 2008 a new package has been introduced where the word ‘baked’ has been removed and the nutritional values are now future on the can in order to highlight the value Heinz places on health issues.

Sony’s release of Playstation 3 came with extensions on the original product like online gaming (as a response to its competitor XBOX 360) , voice activated option for games and the option to play Blue Ray discs, which is a feature that sets them apart from all their competitors. The marketing campaign, according to Sony’s marketing director, consisted in the use of ‘physical space, blogs and other forms of digital networking to inform, entertain and encourage interaction and debate about all the different things the PS3 can do’ .

5.Products in the decline stage of PLC

VCR’s are products that are in a decline stage. They are products that have been replaced by DVD’s and DVD recorders and manufacturers are unlikely to be able to extend their life cycle by adding new features as some retailers don’t even want to stock them. At this point, sales promotions are the only strategy to get rid of the stock, after which the manufacturers will probably have to consider retiring them from the market.

The tobacco industry has had to use different kinds of promotional techniques to revive their products after the marketing and smoking indoors bans. Key existing brands have been strengthened by redesigning the package to a more family friendly look and by creating new

line extensions like lifestyle premiums and used to sponsor different events. To target new markets, the tobacco industry used BTL techniques, such as ‘buzz’, ‘viral’ and guerrilla marketing.

When McCadam cheese, also once known as New York State cheese, changed ownership, its new owners decided to launch a revival campaign to rekindle the brand’s status amongst consumers and reinforce the association it once had with The Big Apple. The advertising agency hired shifted the marketing focus from the deli market to the household market, created a line of promotional materials including print, radio and television, promoted the brand at several events and won several medals at competitions, all part of a successful rebranding marketing campaign.


A good marketing manager will strive to prolong the product’s lifecycle as much as possible in order to reach all organisational objectives but will also know when to retire a product from the market and avoid entering a senility stage where the product will become unprofitable.

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