The PLC or Product Life Cycle is a marketing tool to manage and monitor a products or services life expectancy. It’s a financial trend analysis based over a period-of-time and measures a products or services sales, revenue and accrued expenses.
To estimate the life expectancy, marketing mangers use life cycle assumptions and analyze the four stages of introduction, growth, maturity, and decline.
Introduction – is the launch stage when a product or service is brought to market. Larger investments are typically required to generate brand awareness.
Growth – still requires significant marketing investments to continue increasing the products or services sales and revenues. During growth the company should begin to experience higher profits improving ROI.
Maturity- is the stage when sales begin to level off. Competitors begin to force profit margins to decrease and to stimulate sales, companies aggressively use sales promotion incentives.
Decline – is the final stage when demand decreases and the company must decide to discontinued the product or service or offered them as a lost liter to accommodate or compliment a company’s other product or service lines.