In restaurant point of sale a product passes through certain distinct stages during its life. This cycle of stages is called Product Life Cycle or PLC. The PLC is normally presented as a sales curve spanning the products course from introduction to exit. Concept lies in the fact that each stage in the restaurant point of sale is characterized by a typical market behavior and consequently each stage lends itself to the application of a certain specific marketing strategy. Understanding the PLC concept and managing it effectively can help prolong the profitable phases of the life span of a product.
A typical product at restaurant point of sale passes through distinct stages during the course of its life. During the market pioneering stage, the product is in its introductory stage in the market. Here there may not yet be a ready market for the product. Sales are low; the product undergoes teething troubles; profits seem a remote possibility; demand has to be created and developed; and customers have to be prompted to try out the product. One of the crucial decisions to be taken at this stage is the pricing strategy to be adopted for the product.
The ease and speed with which competitors can bring out similar products is perhaps the most important factor in deciding the pricing strategy at this stage. Another crucial area demanding attention is market development and promotion. That’s where demand has to be created and developed. The firm has to invest heavily in promotion before it sees any returns.
During the market growth stage, the demand for the product increases and the size of the market grows. That’s when one has to stay ahead of his competitors and persuade the customer to prefer his brand. He cannot dictate the price to the customer; he cannot dictate the terms to the channel.