How the market operates in the introduction stage of the PLC
- Sales are typically low
- Firms are losing money, due to low sales and high costs and the need to support the product
- There is generally a limited choice of products, as the firm is looking to “prove” the product concept to the market – and there is limited funds to offer a broader product portfolio at this time
- Innovators are the key target market, as they are more likely to make purchase decisions independent of word-of-mouth
- There is uncertainty within the firm (and possibly the industry) on whether the product will be successful in the long-term
- As a result, over time there is growing pressure within the firm to reassess whether or not to continue supporting the new product
- Retailers are typically less interested in the new product while sales are low – this means that they will often seek incentives to take on the product
- Blogs and specialist websites and magazines provide an opportunity to reach a select market, hopefully rich in innovators
- Free samples and initial discounting is often required to generate first-time purchases (trials)
Also see
Growth phase of the PLC
Maturity Phase
Decline Phase
Overview of the Product Life Cycle
