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📣Intro to Marketing

Stages of Product Life Cycle

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Why This Matters

Every product you'll encounter in marketing follows a predictable journey—from exciting launch to eventual decline. Understanding the Product Life Cycle (PLC) isn't just about memorizing four stages; you're being tested on your ability to match the right marketing strategy to the right stage. This framework shows up constantly in exam questions because it connects pricing decisions, promotional tactics, competitive analysis, and strategic planning all in one model.

The real skill here is recognizing which stage a product is in based on market signals and then recommending appropriate actions. Don't just memorize that "introduction has low sales"—know why profits are negative, how competition changes everything in growth, and when a company should consider harvesting versus revitalizing. Each stage demands different marketing mix adjustments, and that's where exam questions get tricky.

Building the Foundation: Early Stages

The first two stages focus on market development and momentum building. Companies invest heavily upfront, betting that awareness and adoption will eventually generate returns.

Introduction Stage

  • High costs with negative profits—development expenses, launch marketing, and low production volumes mean companies operate at a loss initially
  • Primary demand focus—marketing educates consumers about the product category itself, not just the brand, since awareness is essentially zero
  • Minimal competition—first-mover advantage exists, but so does all the risk of proving the concept works

Growth Stage

  • Rapid sales acceleration—word-of-mouth kicks in, early adopters influence the majority, and the market expands quickly
  • Economies of scale emerge—unit costs drop as production increases, finally pushing profits into positive territory
  • Competitors enter aggressively—success attracts rivals, shifting focus to selective demand (why choose us?) and brand differentiation

Compare: Introduction vs. Growth—both require heavy marketing investment, but introduction builds awareness while growth builds preference. If an exam asks about shifting from primary to selective demand, this transition is your answer.

Managing Maturity: The Longest Stage

Most products spend the majority of their life cycle here. Market saturation means growth stalls, and survival depends on defending position rather than expanding the pie.

Maturity Stage

  • Market saturation reached—most potential buyers have already purchased; new sales come from replacements or switching
  • Intense price competition—with similar products flooding the market, price wars erode margins and force promotional spending
  • Extension strategies become critical—companies pursue new markets, new uses, or product modifications to restart growth

Compare: Growth vs. Maturity—growth sees rising profits from scale; maturity sees profits plateau or decline despite stable sales. The key difference is where new customers come from—growth taps untapped demand, maturity fights for existing customers.

Strategic Exit: The Decline Phase

Decline isn't failure—it's an inevitable stage requiring strategic decisions about resource allocation. Smart companies plan their exit or reinvention.

Decline Stage

  • Sales and profits fall steadily—consumer preferences shift, technology evolves, or superior alternatives capture market share
  • Harvest or divest decisions—companies choose between milking remaining profits with minimal investment or exiting entirely
  • Repositioning as a last resort—some products can be revitalized through dramatic changes in target market or product features, but this is risky and expensive

Compare: Maturity vs. Decline—maturity fights to maintain share through extensions; decline focuses on extracting value or making exit decisions. An FRQ might ask you to recommend whether to extend or harvest—know the cost-benefit tradeoffs.

Quick Reference Table

ConceptBest Examples
Profit trajectoryNegative (Introduction) → Rising (Growth) → Stable/Declining (Maturity) → Falling (Decline)
Primary vs. selective demandPrimary in Introduction; Selective from Growth onward
Competition intensityLow (Introduction) → Increasing (Growth) → Intense (Maturity) → Decreasing (Decline)
Marketing focusAwareness → Preference → Loyalty/Differentiation → Cost management
Pricing strategySkimming or penetration (Introduction) → Competitive (Growth/Maturity) → Discount (Decline)
Strategic priorityMarket development → Market expansion → Market defense → Harvest or exit
Extension strategiesMost relevant in late Maturity stage
DistributionLimited (Introduction) → Expanding (Growth) → Maximum (Maturity) → Selective (Decline)

Self-Check Questions

  1. A product has rapidly increasing sales, new competitors entering weekly, and profits that just turned positive. Which stage is this, and what should the marketing team prioritize?

  2. Compare the profit patterns of the Introduction and Growth stages—why are they different despite both requiring significant marketing investment?

  3. A company notices their product's sales have plateaued and competitors are undercutting prices. Should they pursue extension strategies or begin harvesting? What factors would influence this decision?

  4. Which two stages involve the most intense competitive pressure, and how do the types of competition differ between them?

  5. An FRQ describes a product where "most potential customers have already purchased" and asks for strategic recommendations. What stage is this, and what three extension strategies could you propose?