Product life cycle
Introduces the Product life cycle, its history and its stages. The positive output that the product life cycle produces (Positives). The criticisms (Negatives) of the product life cycle. Concludes that the Product life cycle is an important concept and valid as this is evident in many products available out there in the market, and some products will be looked at closely.
According to (The Product Life Cycle (PLC), 2000-2009) the Product Life Cycle is based on the biological life cycle. For example, a seed is planted (introduction stage); it begins to sprout (growth stage); it shoots out leaves and puts down roots as it becomes an adult (maturity stage); after a long period as an adult the plant begins to shrink and die out (decline stage). In theory it's the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn.
The idea of the Product Life Cycle was first developed in 1965 by Theodore Levitt in an article entitled “Exploit the Product Life Cycle” published in the Harvard Business Review on 1 November 1965 (Levitt, 1965).
Every company is continually in search of behaviours to develop potential cash flows by maximizing revenue from the sale of products and services. Cash Flow permits a company to maintain its feasibility, invest in new product development and expand its workforce. All this in an effort to acquire further market share and develop into a leader in its respective industry. The modern Product Life Cycle is becoming shorter and shorter. Many products in mature industries are revitalized by product differentiation and market segmentation. Organizations gradually re-examine product life cycle costs and revenues, because the time available to sell a product and recover the investment shrinks.
For a business, having a growing and sustainable revenue stream from product sales is important for the stability and success of its operations. The Product Life Cycle model can be used by consultants and managers to analyse the maturity stage of products and industries. Understanding which stage a product is in provides information about expected future sales growth, and the kinds of strategies that should be implemented. The product life cycle concept helps marketing managers to plan alternate marketing strategies to address the challenges that their products are likely to face. It also is useful for monitoring sales results over time and comparing them to those of products having a similar life cycle.
Despite the added challenges, there are several advantages to the early application of life cycle issues analysis in the new product development process. First, among the advantages are those associated with cost savings. Given that it is generally more costly to make adjustments to production equipment after it is designed and installed; certain costs may be abridged or eliminated if designs needed for pollution prevention and waste minimization are built into the original design.
After commercialization it is much harder to change product specifications without upsetting at least some portion of the market. Product specifications decisions which were made in the absence of thought to environmental health and safety issues associated with product use and disposal may be inadequate for at least some intended market (Curran, 1996). Too often, chemical product specifications are set based solely on the physical and chemical functions desired of the product. But direct cost reductions are not the only benefits. During new product development, future commercialization is still uncertain (Curran, 1996). Information is being collected so that business managers can make decisions about how to invest further to develop and commercialize the product.
Considering the environmental life cycle issues of the product early, also helps identify more of the true cost of the product and provides product or business managers input that will help them make better decisions (Curran, 1996). By considering the entire life cycle, one may discover hidden costs of environmental burdens associated with the customers' use of the new product that are not associated with a competitive product. It is much better that the business manager knows this so that he or she can attempt ways to overcome those burdens or at least factor the burdens into the development and commercialization decisions.
Better still, one may find that a new product can compete better with existing products because it does not have the associated environmental burdens of an existing product. Again, it is advantageous to know this sooner rather than later.
Products are likely to go through diverse stages, each stage being affected by diverse competitive circumstances. These stages necessitate different marketing strategies at different times if sales and profits are to be efficiently comprehended. The duration of a product's life cycle is in no way a fixed period of time. It can last from weeks to years, depending on the type of product. In most texts, the discussion of the product life cycle portrays the sales history of a typical product as following an S-shaped curve. However, not all products follow an S-shaped curve.