Is a slowdown in sales growth because the product has achieved acceptance by most potential buyers?

It describes the stages a product passes through from when it was first thought of, till it is finally removed from the market. More briefly, The course of a product’s sales and profits over its lifetime.

The PLC has following distinct stages:

1. Introduction is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.
2. Growth is a period of rapid market acceptance and increasing profits.
3. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
4. Decline is the period when sales fall off and profits drop

When used carefully, the PLC concept can help in developing good marketing strategies for its different stages

1. INTRODUCTION STAGE The introduction stage starts when a new product is first launched. Introduction takes time, and sales growth is apt to be slow.

WHAT HAPPENS ● In this stage, as compared to other stages, profits are negative or low because of the low sales and high distribution and promotion expenses. ● Much money is needed to attract distributors and build their inventories. ● Promotion spending is relatively high to inform consumers of the new product and get them to try it

WHICH STRATEGY TO ADOPT A company, especially the market pioneer, must choose a launch strategy that is consistent with the intended product positioning. As the pioneer moves through later stages of the life cycle, it must continuously formulate new pricing, promotion, and other marketing strategies

1. GROWTH STAGE If the new product satisfies the market, it will enter a growth stage, in which sales will start climbing quickly.

WHAT HAPPENS ● The early adopters will continue to buy, and later buyers will start following their lead, especially if they hear favourable word of mouth. ● Attracted by the opportunities for profit, new competitors will enter the market. They will introduce new product features, and the market will expand. ● Prices remain where they are or decrease only slightly.

WHICH STRATEGY TO ADOPT

The firm uses several strategies to sustain rapid market growth as long as possible. ● It improves product quality and adds new product features and models. ● It enters new market segments and new distribution channels. ● It shifts some advertising from building product awareness to building product conviction and purchase ● it lowers prices at the right time to attract more buyers.

1. MATURITY STAGE At some point, a product’s sales growth will slow down, and it will enter the maturity stage. This maturity stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management.

WHAT HAPPENS ● The slowdown in sales growth results in many producers with many products to sell. ● In turn, this overcapacity leads to greater competition. ● Competitors begin marking down prices, increasing their advertising and sales promotions, and upping their product development budgets to find better versions of the product. ● These steps lead to a drop in profit. ● Some of the weaker competitors start dropping out, and the industry eventually contains only well-established competitors.

WHICH STRATEGY TO ADOPT A good offence is the best defence. They should consider modifying the market and/or product ● In modifying the market, the company tries to increase consumption by finding new users and new market segments for its brands. The manager may also look for ways to increase usage among present customers. ● The company might also try modifying the product—changing characteristics such as quality, features, style, or packaging to attract new users and inspire more usage. ● For example, TABASCO pepper sauce may have been around for more than 140 years, but to keep the brand young, the company has added a full line of flavours (such as Garlic, Sweet & Spicy, and Chipotle) and a kitchen cabinet full of new products under the TABASCO name (such as steak sauces, spicy beans, a chilli mix, salsas, jalapeno nacho slices, and even spicy chocolate and a TABASCO lollipop).

1. DECLINE STAGE Sales may plunge to zero, or they may drop to a low level where they continue for many years.

WHAT HAPPENS ● As sales and profits decline, some firms withdraw from the market. ● Those remaining may prune their product offerings. ● They may drop smaller market segments and marginal trade channels, or they may cut the promotion budget and reduce their prices further

WHICH STRATEGY TO ADOPT A firm’s first task is to identify those products in the decline stage by regularly reviewing sales, market shares, costs, and profit trends. Then management must decide whether to maintain, harvest, or drop each of these declining products. ● Management may decide to maintain its brand, repositioning or reinvigorating it in hopes of moving it back into the growth stage of the PLC. P&G has done this with several brands ● Management may decide to harvest the product, which means reducing various costs (plant and equipment, maintenance, R&D, advertising, sales force), hoping that sales hold up. If successful, harvesting will increase the company’s profits in the short run ● Finally, management may decide to drop the product from its line. It can sell it to another firm or simply liquidate it at salvage value

The PLC concept also can be applied to what are known as styles, fashions, and fads

● A style is a basic and distinctive mode of expression. Once a style is invented, it may last for generations, passing in and out of vogue. ○ Example: Clothing (formal, casual) and art (realist, surrealist, abstract)

● A fashion is a currently accepted or popular style in a given field. Fashions tend to grow slowly, remain popular for a while, and then decline slowly ○ Example: The business casual look of the 2000s.

● Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. ○ Example: Keto diet

What is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers?

In which stage there is a slowdown in sales growth?

Is a period of slow sales growth as the product?

In which stage the sale of the product stabilizes and the growth slows down?