Definition of product life cycle (PLC)

theory that recognizes four separate developmental stages in the life span of a product, with each stage characterized by its own distinct marketing opportunities and restraints. In a product's introductory stage, growth is slow, with minimal profits, since consumers' purchases have merely been on a trial basis. If the product is successful, it goes into a growth stage, where its growth rapidly expands by new market entries, improved distribution channels, and shrewd pricing strategies. A maturity stage follows, where sales and profits stabilize. Finally, the product goes into a decline, where sales and profits decrease. The product life cycle theory states that a typical product's life cycle follows the form of an S-shaped curve, although some products may have a very rapid growth stage or an immediate decline. Also, some mature products can have their life cycle reversed. For example, when baking soda was launched, it was used only for cooking and quickly reached the maturity stage of its life cycle. When it was discovered that baking soda deodorized refrigerators, however, the product's sales soared and its new use put it back in the growth stage of its life cycle.