2:Demonstrate product life cycle
The product life cycle (PLC) is a concept that describes the journey a product goes through from its introduction to its eventual decline in the market. It consists of four stages: introduction, growth, maturity, and decline. Here is an example to demonstrate the product life cycle using a smartphone:
1. Introduction Stage:
- The smartphone is introduced to the market with a unique design and advanced features.
- The company invests heavily in marketing and promotion to create awareness and attract early adopters.
- Sales are initially slow due to the high price and limited availability.
- The company faces challenges in recovering its initial investment and establishing market share.
2. Growth Stage:
- The smartphone gains popularity as more features and applications are added, such as upgraded cameras and improved processing power.
- Competitors begin to enter the market with similar products, leading to increased competition.
- Sales rapidly increase as the product becomes more affordable, and consumer demand grows.
- The company focuses on expanding distribution channels and enhancing customer support to meet the rising demand.
3. Maturity Stage:
- The smartphone market reaches a saturation point, with numerous competitors offering similar products.
- Sales growth slows down as most potential customers already own a smartphone.
- Companies focus on product differentiation and improvement to maintain market share.
- Pricing becomes more competitive, leading to reduced profit margins.
4. Decline Stage:
- The smartphone market starts declining due to technological advancements and changing consumer preferences.
- Sales decline as consumers shift towards newer products or replacement models.
- Companies may choose to discontinue the product or offer significant discounts to clear inventory.
- Marketing efforts are reduced, and the focus is shifted towards new product development.
It's important to note that the duration of each stage can vary depending on various factors such as market conditions, competition, and technological advancements. Moreover, not all products may go through each stage or may experience different variations of the product life cycle.