Maturity
Here product sales peak and settle at a stable level. This is normally the
longest phase of the PLC, with organisations experiencing some reduction in
profit level. This is due to the intense competition common in mature mar-
kets. As no natural growth exists, market share is keenly contested and mar-
keting expenditure is increased. Marketers may try to expand their potential
customer base by encouraging more use or finding new market segments.
Decline
The decline stage can be gradual or rapid. It is possible to turn-around
declining products and move them back into the mature phase of the
cycle. The alternative is replacement. A residual demand will exist, with
current users needing parts, services and on-going support. Often the
decline phase offers a choice, re-investing (turn-around/replace) or a ‘har-
vesting’ strategy that involves maximising financial returns from the
product and limiting expenditure.
To fully utilise the PLC, managers need a detailed understanding of
concept and the following points merit consideration.
● Industry and product line: The PLC concept can also apply to overall
industry sales. Clearly, the PLC for individual product lines needs to be
considered in relation to this. For example, if industry is entering the
decline phase of its PLC, it may be unwise to launch new product lines.
Currently, high-technology industries, such as telecommunications, are
in the growth phase. However, individual products lines have very
short PLC’s as they are rapidly replaced by more advanced technology.
Make sure you understand where the industry is in terms of overall
PLC and how your portfolio of products fits into this overall pattern.
● Shape of the PLC: While the PLC normally conforms to the classic
‘S-shape’ curve (see Figure 8.14), it is not always the case. PLCs can
take different forms. They can display: (i) cyclical/seasonal trends, (ii)
constant demand, where a steady level of sales is reached or (iii) rapid
growth and fall, common to fashion or fad products (see Figure 8.15).
Strategy formulation 171Cyclical PLC Constant demand PLC Fad PLC
Figure 8.15
Variation in PLC
shape