Does Plc Really Make Sense?
- Submitted by: bl1206
- Views: 769
- Category: English
- Date Submitted: 11/28/2010 06:34 PM
- Pages: 9
- Report this Essay
Does PLC really make sense?
INTRODUCTION
PLC (product life cycle), it is well known for a long time both in the studies of general economy and management, and also be widely used in companies. However, why do companies usually uses PLC assessment techniques to assess one product? Does PLC really make sense? This question is the core problem of my report, and my work is to understand what is PLC, to find out the advantages and disadvantages of it, and deal with suggestions for using PLC thinking into the business with real company case.
FOCUS
➢ Conceptions of PLC, and its performance
➢ PLC of Wang Lao Ji Tea analysis
➢ PLC’s pro and con
BASIC OVERVIEW
Conceptions of PLC and its performance
A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle (PLC) and is associated with changes is the marketing situation, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the figure 1:
[pic]
Figure 1—Product Life Cycle Diagram
Source: own analysis and draw on data from John D. Daniels (2004) INTERNATIONAL BUSINESS
There are four stage of PLC and each stage reflect different situation and influence marketing mix.
Introduction Stage
In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
• Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained.
• Price may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
• Distribution is selective until consumers show acceptance of the product.
• Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate...
INTRODUCTION
PLC (product life cycle), it is well known for a long time both in the studies of general economy and management, and also be widely used in companies. However, why do companies usually uses PLC assessment techniques to assess one product? Does PLC really make sense? This question is the core problem of my report, and my work is to understand what is PLC, to find out the advantages and disadvantages of it, and deal with suggestions for using PLC thinking into the business with real company case.
FOCUS
➢ Conceptions of PLC, and its performance
➢ PLC of Wang Lao Ji Tea analysis
➢ PLC’s pro and con
BASIC OVERVIEW
Conceptions of PLC and its performance
A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle (PLC) and is associated with changes is the marketing situation, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the figure 1:
[pic]
Figure 1—Product Life Cycle Diagram
Source: own analysis and draw on data from John D. Daniels (2004) INTERNATIONAL BUSINESS
There are four stage of PLC and each stage reflect different situation and influence marketing mix.
Introduction Stage
In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
• Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained.
• Price may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
• Distribution is selective until consumers show acceptance of the product.
• Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate...