Apr 162017
 

In order to assess where a product is on the PLC curve, a multiple of factors can be considered, including:

  • Sales to date, graph accordingly, to visually demonstrate any turning points from introduction to growth, and so on,
  • The number of competitors entering/leaving the marketplace (competitors enter in growth and leave in decline),
  • The number of retailers and other distributors entering/leaving the market (retailers will tend to make the product more prominent in the growth and/or early maturity phase),
  • The number of product innovations/offerings and product line extensions (there is an increase in innovation in growth and increase in product line extension in maturity),
  • The stability of market share (market shares will stabilize in maturity),
  • The stability of profit margins and pricing (pricing and profit margins generally stabilize in maturity),
  • The proportion of consumers adopting the product (first time customers are very high in introduction and growth, but relatively minimal in maturity),
  • The level of advertising, and its focus (advertising expenditure will tend to flatten in maturity and shift towards subtle differences of the brands offering – whereas awareness and basic information communication is common in introduction/growth).

These aspects of overall market conditions – as opposed to using changes in market sales levels only – will provide a more accurate identification of the current life cycle stage of the product.