1.Identify the characteristics in the various stages of the Product Life Cycle(PLC). 2.Identity the laggards in the PLC

Characteristics of the various stages of the product life cycle(PLC)

Characteristics		Introduction	Growth		Maturity	Decline
Sales		Low sales	Rapid rising sales		Peak sales	Declining sales
Cost		High cost per customer	Average cost per customer		Low cost per customer	Low cost per customer
Profit		Negative	Rising profit		High profit	Declining profits
Customer		Innovators	Early adopter		Middle majority	Laggards
competitors	few		Growing number	Stable/number beginning to decline		Declining number
Risk	high		lower	higher		highest

Introduction stage

The introduction stage starts when the new product is first launched. Introduction takes time, and sales growth is apt to be slow. 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. Because the market is not generally ready for product refinements at this stage, the company and its few competitors produce basic versions of
the product. These firms focus their selling on those buyers who are the readiest to buy.
A company, especially the market pioneer, must choose a launch strategy that is consistent with the intended product positioning. It should realize that the initial strategy is just the first step in a grander marketing plan for the product's entire life cycle. If the pioneer chooses its launch strategy
to make a "killing," it will be sacrificing long-run revenue for the sake of short-run gain. As the pioneer moves through later stages of the life cycle, it will have to continuously formulate new pricing, promotion, and other marketing strategies. It has the best chance of building and retaining
market leadership if it plays its cards correctly from the start.

Growth Stage

If the new product satisfies the market, it will enter a growth stage, in which sales will start climbing quickly. The early adopters will continue to buy, and later buyers will start following their lead, especially if they hear favorable 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. The increase in competitors leads to an increase in the number of distribution outlets, and sales jump just to build reseller inventories. Prices remain where they are or fall only slightly.
Companies keep their promotion spending at the same or a slightly higher level. Educating the market remains a goal, but now the company must also meet the competition.
Profits increase during the growth stage, as promotion costs are spread over a large volume and as unit manufacturing costs fall. 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, and it lowers prices at the right time to attract more buyers.
In the growth stage, the firm faces a trade-off between high market share and high current profit. By spending a lot of money on product improvement, promotion, and distribution, the company can capture a dominant position. In doing so, however, it gives up maximum current profit, which it hopes to make up in the next stage.

Maturity Stage

At some point, a product's sales growth will slow down, and the product will enter a maturity stage. This maturity stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management. Most products are in the maturity stage of the life cycle, and
therefore most of marketing management deals with the mature product.
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 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.
Although many products in the mature stage appear to remain unchanged for long periods, most successful ones are actually evolving to meet changing consumer needs. Product managers should do more than simply ride along with or defend their mature products—a good offense is the best
defense. They should consider modifying the market, product, and marketing mix. In modifying the market, the company tries to increase the consumption of the current product. It looks for new users and market segments, as when Johnson & Johnson targeted the adult market
with its baby powder and shampoo. The manager also looks for ways to increase usage among present customers Or the company may want to reposition the brand to appeal to a larger or faster growing segment.

The company might also try modifying the product—changing characteristics such as quality, features, or style to attract new users and to inspire more usage. It might improve the product's quality and performance—its durability, reliability, speed, or taste. Or it might add new features that expand the product's usefulness, safety, or convenience. Finally, the company can improve the product's styling and attractiveness. Thus, car manufacturers restyle their cars to attract buyers who want a new look. The makers of consumer food and household products introduce new flavors, colors, ingredients, or packages to revitalize consumer buying.
Finally, the company can try modifying the marketing mix—improving sales by changing one or more marketing mix elements. It can cut prices to attract new users and competitors' customers. It can launch a better advertising campaign or use aggressive sales promotions—trade deals, some cedis or cents off, premiums, and contests. The company can also move into larger market channels, using mass merchandisers, if these channels are growing. Finally, the company can offer new or improved services to buyers.

Decline Stage

Here Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. 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. Carrying a weak product can be very costly to a firm, and not just in profit terms. There are many hidden costs. A weak product may take up too much of management's time. It often requires
frequent price and inventory adjustments. It requires advertising and sales force attention that might be better used to make "healthy" products more profitable. A product's failing reputation can cause customer concerns about the company and its other products. The biggest cost may well lie in the future. Keeping weak products delays the search for replacements, creates a lopsided product mix, hurts current profits, and weakens the company's foothold on the future.
For these reasons, companies need to pay more attention to their aging products. The 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 harvest the product, which means reducing various costs (plant and equipment, maintenance, advertising, sales force) and hoping that sales hold up. If successful, harvesting will increase the company's profits in the short
run. Or management may decide to drop the product from the line. It can sell it to another firm or simply liquidate it at salvage value. If the company plans to find a buyer, it will not want to rundown the product through harvesting.
The Product Life Cycle can be extended by two ways either by modifying the target market by finding and adding new users etc or by modifying the product Adding new features, variations, model varieties will change the consumer reaction - create more demand therefore you attract
more users To prevent the product going into decline you modify the product

SOME LAGGARDS IN THE P.L.C

Introduction Stage-, Sales growth is apt to be slow in this stage, as compared to other stages; profits are negative or low because of the low sales and high distribution and promotion expenses

In the Growth Stage, the firm faces a trade-off between high market share and high current profit, Prices remain where they are or fall only slightly.
Companies keep their promotion spending at the same or a slightly higher level. Educating the market remains a goal, but now the company must also meet the competition.
 

Maturity Stage -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 budgets to find better versions of the product. These steps lead to a drop in profit.

Decline stage -Here Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. 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. Carrying a weak product can be very costly to a firm, and not just in profit terms. There are many hidden costs. A weak product may take up too much of management's time. It often requires
frequent price and inventory adjustments