Product Life Cycle

The Product Life Cycle (PLC) is used to map the lifespan of a product. It is the period of time over which an item is developed, brought to market and eventually removed from the market. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. There is no set time period for the PLC and the length of each stage may vary. One product’s entire life cycle could be over in a few months. Another product could last for years. Also, the introduction stage may last much longer than the growth stage and vice versa. The four stages in a Product Life Cycle –

·        Introduction: Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through product development, involves prototype and market tests. Companies incur more costs in this phase and also bear additional cost for distribution. On the other hand, there are a few customers at this stage, means low sales volume. So, during introductory stage company’s profits shows a negative figure because of huge cost but low sales volume.

·        Growth: In this stage, company’s sales and profits starts increasing and competition also begin to increase. The product becomes well recognized at this stage and some of the buyers repeat the purchase patterns. During this stage, firms focus on brand preference and gaining market share.

·        Maturity: At maturity stage, brand awareness is strong so sale continues to grow but at a declining rate as compared to past. At this stage, there are more competitors with the same products. So, companies defend their market share.  At this stage usually loyal customers make purchases.

·        Decline: Decline in sales, change in trends and unfavorable economic conditions explain decline stage. At this stage market becomes saturated so sales declines. It may also be due technical obsolescence or customer taste has been changed.

Red Bull is currently experiencing the maturity stage in its product life cycle.
Launched in 1987, that period will be classified as the introduction stage. It was at this stage that heave promotions were done to make the buyers aware of this new product in the market. Distribution at this stage was selective and scattered.  Promotion was done with intention to build brand awareness.

The next few years post the introduction (probably in the early 90’s) would define the growth stage for Red Bull. Distribution became more significant with the increased demand and acceptability of product. More channels were added for intensive distribution in order to meet increasing demand. Along with maintaining the existing quality, new features and improvements in product were done

The late 90’s and early 2000’s is when the maturity stage began. It continues to exist till this date. Red bull added features and modify the product in order to compete in market and differentiate the product from competition (a new sugar free version was also introduced). New channels are being added to face intense competition and incentives are offered to retailers to get shelf preference over competitors.