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P3-Product Life Cycle (PLC)
ACCA P3考試：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 |
1. 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.
2. 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.
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