Tabasco Product Life Cycle

Product development





Losses/ investment ($)

Products The Mature Stage

Product life cycle: Some products die quickly: others stay in the mature stage for a long, long time. TABASCO hot sauce is "over 130 years old and yet still able to totally whup your butt!"

Product life cycle

The course of a product's sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline.

Management is aware that each product will have a life cycle, although its exact shape and length is not known in advance.

#Figure 9.2 shows a typical product life cycle (PLC), the course that a product's sales and profits take over its lifetime. The product life cycle has five distinct stages:

1. Product development begins when the company finds and develops a new-product idea. During product development, sales are zero and the company's investment costs mount.

2. Introduction is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.

3. Growth is a period of rapid market acceptance and increasing profits.

4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.

5. Decline is the period when sales fall off and profits drop.

Not all products follow this product life cycle. Some products are introduced and die quickly; others stay in the mature stage for a long, long time. Some enter the decline stage and are then cycled back into the growth stage through strong promotion or repositioning. It seems that a well-managed brand could live forever. A Such venerable brands as Coca-Cola, Reuters, Schering, HSBC, Siemens, and TABASCO, for instance, are still going strong after more than 100 years.

The PLC concept can describe a product class (gasoline-powered automobiles), a product form (SUVs), or a brand (the Ford Escape). The PLC concept applies differently in each case. Product classes have the longest life cycles—the sales of many product classes stay in the mature stage for a long time. Product forms, in contrast, tend to have the standard PLC shape. Product forms such as "dial telephones" and "cassette tapes" passed through a regular history of introduction, rapid growth, maturity, and decline.

A specific brand's life cycle can change quickly because of changing competitive attacks and responses. For example, although laundry soaps (product class) and powdered detergents (product form) have enjoyed fairly long life cycles, the life cycles of specific brands have tended to be much shorter. Today's leading brands of powdered laundry soap acre Tide and Axion; the leading brands 75 years ago were Fels-Napfta OtfagHoi, and ISrfam«

Product life cycle: Some products die quickly: others stay in the mature stage for a long, long time. TABASCO hot sauce is "over 130 years old and yet still able to totally whup your butt!"


A basic and distinctive mode of expression.


A currently accepted or popular style in a given field.

A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.

The PLC concept also can be applied to what are known as styles, fashions, and fads. Their special life cycles are shown in Figure 9.3. A Style is a basic and distinctive mode of expression. For example, styles appear in homes (colonial, ranch, transitional), clothing (formal, casual), and art (realist, surrealist, abstract). Once a style is invented, it may last for generations, passing in and out of vogue. A style has a cycle showing several periods of renewed interest. A fashion is a currently accepted or popular style in a given field. For example, in some countries, the more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of today. Fashions tend to grow slowly, remain popular for a while, and then decline slowly.

Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.» A fad may be part of an otherwise normal life cycle as in the case of recent surges in the sales of poker chips and accessories. Or the fad may comprise a brand's or product's entire life cycle. "Pet rocks" are a classic example. Upon hearing his friends complain about how expensive it was to care for their dogs, advertising copywriter Gary Dahl joked about his pet rock. He soon wrote a spoof of a dogtraining manual for it, titled "The Care and Training of Your Pet Rock." Soon Dahl was selling some 1.5 million ordinary beach pebbles at $4 a pop. Yet the fad, which broke one October, had sunk like a stone by the next February. Dahl's advice to those who want to succeed with a fad: "Enjoy it while it lasts."32

The PLC concept can be applied by marketers as a useful framework for describing how products and markets work. And when used carefully, the PLC concept can help in developing good marketing strategies for different stages of the product life cycle. But using the PLC concept for forecasting product performance or for developing marketing strategies presents some practical problems. For example, in practice, it is difficult to forecast the sales level at each PLC stage, the length of each stage, and the shape of the PLC curve Using the PLC concept to develop marketing strategy also can be difficult because strategy is both a cause and a result of the product's life cycle. The product's current PLC position suggests the best marketing strategies, and the resulting marketing strategies affect product performance in later life-cycle stages.

Moreover, marketers should not blindly push products through the traditional stages of the product life cycle. "As marketers instinctively embrace the old life-cycle paradigm, they needlessly consign their products to following the curve into maturity and decline," notes one marketing professor. Instead, marketers often defy the "rules" of the life cycle and position their products in unexpected ways. By doing this, "companies can rescue products foundering in the maturity phase of their life cycles and return them to the growth phase. And they can catapult new products forward into the growth phase, leapfrogging obstacles that could slow consumers' acceptance."33

The moral of the product life cycle is that companies must continually innovate or they risk extinction. No matter how successful its current product lineup, for future success, a company must skillfully manage the life cycles of existing products. And to grow, it must develop a steady stream of new products that bring new value to customers (see Real Marketing 9.2).


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