What is Life Cycle Cost in Marketing?

Learn Life Cycle Cost definition in marketing with explanation to study “What is Life Cycle Cost”. Study life cycle cost explanation with marketing terms to review marketing course for online MBA programs.

Life Cycle Cost Definition

  • Product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



Life Cycle Cost Explanation

Life-cycle cost examination is a technique for surveying the absolute expense of office possession. It considers all expenses of getting, owning, and discarding a structure or building framework. LCCA is particularly valuable when venture choices that satisfy a similar exhibition necessities, however contrast regarding starting expenses and working expenses, must be contrasted all together with select the one that boosts net reserve funds. For instance, LCCA will help decide if the consolidation of an elite HVAC or coating framework, which may build beginning expense however result in significantly diminished working and upkeep costs, is practical or not. LCCA isn't valuable for spending portion. Least life-cycle cost is the most clear and simple to-decipher proportion of financial assessment. Some other normally utilized measures are Net Savings (or Net Benefits), Savings-to-Investment Ratio (or Savings Benefit-to-Cost Ratio), Internal Rate of Return, and Payback Period.

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