Product Life Cycle is a sales process of a product in it’s lifetime. The PLC is an important concept that provides an understanding of the competitive dynamics of a product. The duration of PLC itself can be in a short term or long term.
There are 5 stages of Product Life Cycle which are:
- Product Development
- Introduction
- Growth
- Maturity
- Decline
1. Product Development
Product Development stage is to describe a complete process in seeking a new product to reach the market.
Ex: Allen purchased the formula for his root beer from a pharmacist in Arizona. To this day, the unique blend of herbs, spices, barks and berries remains a proprietary secret.
With the success of his first root beer stand in Lodi, Allen soon opened a second stand in nearby Sacramento. It was there that what is thought to be the country's first "drive-in" featuring "tray-boys" for curb side service, opened up.
2. Introduction
Introduction stage is an early stage of the company in introducing it’s products to the consumers. At this stage, the products began to be marketed in large numbers even though the sales volume has not been high. The products are sold generally new products, because it is still in the early stages.
Ex: Roy Allen mixed up a batch of creamy root beer and sold the first frosty mug for one nickel, when no one has that idea. Now, more than seventy years later, A&W root beer is the world's number one selling root beer and is still mixed fresh daily and sold at hundreds of A&W.
3. Growth
Growth stage is the introduced product is already known and accepted by the consumer.
Ex: Products introduced by A&W are well known and accepted by consumers. In 1919, A&W began selling root beer and sold this refreshing first cold drink for one nickel. In 1922, Allen recruited a partner, Frank Wright, an original employee of Lodi. Both partners combine their initials "A" for Allen and "W" for Wright and are officially named. A&W root beer has three stand units opened in Sacramento, North & Central California and States of Texas and Utah.
4. Maturity
Maturity stage is increased slowing sales turnover, competing closely and striving to grab market share with competitors.
Ex: Sales turnover is slowing, competing tightly and struggling to grab market share with it’s competitors.
The strategy of A&W is that food and beverage products served are tailored to the tastes and needs of the customers. Each of the restaurant management conducts market research on which foods and beverages are most preferred, how many times they buy them, where to buy them and other information related to consumer tastes.
5. Decline
Decline stage is sales and profits will decrease and if not doing with the right strategy, the product offered may be lost from the market.
Ex: Sales and profits are declining, if not doing the right strategy and the product on offer may be lost from the market.
A&W provides a website for consumers to see what new products they have, all information relaed to A&W, and feedback from consumers in order to be a better reference for the future. A&W has a team to receive feedback from customers who then forward those feedbacks to the right parties within the company to ensure that high A&W quality standards are maintained.
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