Product Life Cycle （PLC）
ACCA P3考试：Product Life Cycle （PLC）
1. The Model
Product lifespans vary by type of product. Perishable goods （e.g. fruit and vegetables） have a short lifespan. Durables （e.g. cars） have a longer lifespan. Although lifespans vary， product life cycles have common elements and follow similar stages.
2. The details
| Stages | Features | Examples of Possible Strategies |
| Development | High cost outlay （e.g. in research） |
European airline manufacturer investing $600 million in new plant in US （Airbus in Alabama）. |
| Introduction | Initial product launch, Customers unfamiliar with product, Low profitability |
Rapid skimming （high level promotion and high price）, Slow penetration （low price） |
| Growth | Sales volumes increase, Competitors enter market, Falling unit costs （economies of scale, learning effect, etc） |
Add value/Improve quality, Expand distribution, Reduce price, Build brand loyalty |
| Maturity | Stable demand for product, Increased market competition |
Modify market/product mix, Find "spin-off" products to build on goodwill of brand |
| Decline | Having reached saturation point demand falls, Decline in number of competitors |
Divest, Focus on niche market, Minimise promotion |
3. Benefits
The PLC model helps focus managers and planners on：
▍The stage of the life cycle a product has reached；
▍The remaining life of a product-the length of time the product will continue to contribute to profits； and
▍The urgency to develop new products or improve products.
4. Weaknesses
▍Only indicates where the product/market is now rather than where it will be.
▍The theory cannot be used for forecasting due to uncertain stage duration.
▍Life cycle patterns vary.
▍No allowance for products that fail during development or introduction.
▍No allowance for products that seem to be mature forever.
