BUAD 307





The Product Life Cycle--Issues

PowerPoint Narration

The Product Life Cycle (PLC) impacts a number of strategic issues.  As a market matures, firms will generally face more competition.  Since the growth of the market is limited, they cannot grow much unless they do so by taking market share away from competitors.  Therefore, firms will find it more difficult to reinvest profits in growth.  There will generally be a strong downward pressure on prices.  In addition, competition is likely to grow in terms or features and quality.  The product category will also likely compete with an increasing number of other product categories to satisfy similar customer needs.

At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm & Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also created.