INSTITUTO TECNOLGICO DE MONTERREY Y DE

ESTUDIOS
SUPERIORES CAMPUS TOLUCA

INTEGRATED MANUFACTURING SYSTEMS

PRODUCT DEVELOPMENT CYCLE

Made by:
Daniela Garduo Hernndez A01361972
Hctor Ivn Martnez Zarco A01360144
Jos Alfredo Moreno Rebollo A01363842

Teacher:
Carlos Prez lvarez
DUE DATE: 11/AGOSTO/2016

PRODUCT LIFE CYCLE

The product development cycle, better known as the product life cycle
(PLC), is the cycle through which every product goes through from introduction
to withdrawal or eventual demise. It is very important to know about this issue,
since the understanding of the PLC will help a business to manage its cash flow
given that when the product is introduced into the market the business will
probably incur significant costs in marketing campaigns and as the product
moves into its growth phase, the cost of promoting the product should decrease
as cash flow from product sales increase so the business could see a profit.
This way, profits should continue through maturity until sales fall as the product
begins to decline.
However, throughout the entire process manufacturers face a different
set of challenges. Product life cycle management is the application of different
strategies to help meet these challenges and ensure that, whatever stage of the
cycle a product may be going through, the manufacturer can maximize sales
and profits for their product. Therefore, businesses are focus on areas such as
development, financing, marketing, manufacturing and information.
In order to be successful it is of paramount importance to know the 4
stages of the PLC inasmuch as every stage has its own characteristics that
mean different things for business that are trying to manage the life cycle of
their particular products. Because of that these stages will be studied below.

Product life cycle stages:

1. Introduction Stage This stage of the cycle could be the most expensive
for a company launching a new product. The size of the market for the
product is small, which means sales are low, although they will be
increasing. On the other hand, the cost of things like research and
development, consumer testing, and the marketing needed to launch the
product can be very high, especially if its a competitive sector.
In this phase the firm seeks to build product awareness and develop a
market for the product. The impact on the marketing mix is as follows:
2. Growth Stage The growth stage is typically characterized by a strong
growth in sales and profits, and because the company can start to benefit
from economies of scale in production, the profit margins, as well as the
overall amount of profit, will increase. This makes it possible for
businesses to invest more money in the promotional activity to maximize
the potential of this growth stage.

That means that the firm tries to build brand preference and increase
market share.
3. Maturity Stage During the maturity stage, the product is established
and the aim for the manufacturers is now to maintain the market share
they have built up. This is probably the most competitive time for most
products and businesses need to invest wisely in any marketing they
undertake. They also need to consider any product modifications or
improvements to the production process which might give them a
competitive advantage.
Nevertheless, the strong growth in sales diminishes. Competition may
appear with similar products and the primary objective is to defend
market share while maximizing profit.
4. Decline Stage Eventually, the market for a product will start to shrink,
and this is whats known as the decline stage. This shrinkage could be
due to the market becoming saturated (i.e. all the customers who will buy
the product have already purchased it), or because the consumers are
switching to a different type of product. While this decline may be
inevitable, it may still be possible for companies to make some profit,
since they have several options:

Maintain the product, possibly rejuvenating it by adding new

features and finding new uses.

Harvest the product- reduce costs and continue to offer it,

possibly to a loyal niche segment.

Discontinue the product, liquidating remaining inventory or

selling it to another firm that is willing to continue the
product.

Impact on the marketing mix in every stage of the PLC

Stag
e

Introduction

Growth

Maturity

Decline

Product quality
is maintained
and additional
features and
support

Product
features may
be enhanced
to differentiate
the product

The marketing
mix decisions in
this stage will
depend on the
selected

Impact in
Product

Product branding
and quality level
is established
and intellectual
property

services may
be added.

Pricing

Distribution

Promotion

protection such
as patents and
trademarks are
obtained.
There may be
It is maintained
low penetration
as the firm
pricing to build
enjoys
market share
increasing
rapidly, or high
demand with
skim pricing to
little
recover
competition.
development
costs.
It is selective until
Distribution
customers show
channels are
acceptance of the
added as
product.
demand
increases and
customers
accept the
product.

It is aimed at
innovators and
early adopters.
Marketing
communications
seeks to educate
potential
consumers about
the product.

It is aimed at a
broader
audience.

from that of
competitors.

Pricing may be
lower because
of the new
competition.

Distribution
becomes more
intensive and
incentives may
be offered to
encourage
preference
over
competing
products.

strategy. For
example, the
product may be
changed if it is
being
rejuvenated, or
left unchanged
if it is being
harvested, or
reduced
drastically if
liquidated.
Therefore the
impact in the
marketing will
depend on the
strategy the
enterprise
follows.

Promotion
emphasizes
product
differentiation.

New Product Development

This product life cycle management process involves a range of different
marketing and production strategies, all geared towards making sure the
product life cycle curve is as long and profitable as possible.

Idea

Researc
h

Develo
p

Testing

Analysi
s

Intro

Idea: Every product has to start with an idea. In fact, many of the leading
manufacturers will have whole departments that focus solely on the task of
coming up with the next big thing.
Research: An organization may have plenty of ideas for a new product, the next
step is to start researching the market.
Development: Prototypes may be modified through various design and
manufacturing stages in order to come up with a finished product that
consumers will want to buy.
Testing: First the company begin to produce the product, most companies will
test their new product with a small group of actual consumers.
Analysis: Looking at the feedback from consumer testing enables the
manufacturer to make any necessary changes to the product, and also decide
how they are going to launch it to the market.
Introduction: Finally, the company introduce the product into the market.

Bibliography:
Business Case Studies. (s.f.). Business Case Studies. Recuperado el 9 de 08
de 2016, de http://businesscasestudies.co.uk/jd-sports/balancing-theproduct-portfolio-to-satisfy-customer-demand/purpose-of-the-productlife-cycle.html#axzz4GtJw2bgi

Internet Center for Management and Business Administration,Inc. (2010).

QuickMBA. Recuperado el 9 de 08 de 2016, de
http://www.quickmba.com/marketing/product/lifecycle/
Product Life Cycle Stages. (9 de 08 de 2016). Product Life Cycle Stages.
Recuperado el 9 de 08 de 2016, de http://productlifecyclestages.com/
The Economic Times. (s.f.). Product Life Cycle. Recuperado el 9 de 08 de
2016, de http://economictimes.indiatimes.com/definition/product-lifecycle