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The Product Lifecycle

 

Disciplines > MarketingUnderstanding Markets > The Product Lifecycle

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Products have distinct lifecycles that can be understood in terms of their progression through four key stages that are based in the metaphor of a human life:

 

Each stage is discussed in more detail in the following sections:

  • Introduction: Early market.
  • Growth: Sales taking off.
  • Maturity: Stable market.
  • Decline: End of life.

There are many variations on this with additional stages including:

  • Precommercialization: research and considerations before development.
  • Development: creating the product, before introduction.
  • Competitive turbulence: shaking out of weaker competitors.
  • Extension: stretching out the maturity period.
  • Saturation: after maturity
  • Death or Withdrawal: after decline.
  • Next-product development: Concurrent development.

Sometimes the graph is shown with profit as the vertical axis, which is negative during introduction and during decline.

 

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PROBLEMS WITH THE PRODUCT LIFE CYCLE THEORY

While the product life cycle theory is widely accepted, it does have critics who say that the theory has so many exceptions and so few rules that it is meaningless. Among the holes in the theory that these critics highlight:

  • There is no set amount of time that a product must stay in any stage; each product is different and moves through the stages at different times. Also, the four stages are not the same time period in length, which is often overlooked.
  • There is no real proof that all products must die. Some products have been seen to go from maturity back to a period of rapid growth thanks to some improvement or re-design. Some argue that by saying in advance that a product must reach the end of life stage, it becomes a self-fulfilling prophecy that companies subscribe to. Critics say that some businesses interpret the first downturn in sales to mean that a product has reached decline and should be killed, thus terminating some still-viable products prematurely.
  • The theory can lead to an over-emphasis on new product releases at the expense of mature products, when in fact the greater profits could possibly be derived from the mature product if a little work was done on revamping the product.
  • The theory emphasizes individual products instead of taking larger brands into account.
  • The theory does not adequately account for product redesign and/or reinvention.
 

The PLC model offers some degree of usefulness to marketing managers, in that it is based on factual assumptions. Nevertheless, it is difficult for marketing management to gauge accurately where a product is on its PLC graph. A rise in sales per se is not necessarily evidence of growth. A fall in sales per se does not typify decline. Furthermore, some products do not (or to date, at the least, have not) experience a decline.Coca Cola and Pepsi are examples of two products that have existed for many decades, but are still popular products all over the world. Both modes of cola have been in maturity for some years.

Another factor is that differing products would possess different PLC "shapes". A fad product would hold a steep sloped growth stage, a short maturity stage, and a steep sloped decline stage. A product such as Coca Cola and Pepsi would experience growth, but also a constant level of sales over a number of decades. It can probably be said that a given product (or products collectively within an industry) may hold a unique PLC shape, and the typical PLC model can only be used as a rough guide for marketing management. This is why its called the product life cycle. The duration of PLC stages is unpredictable. It is not possible to predict when maturity or decline will begin. Strict adherence to PLC can lead a company to misleading objectives and strategy prescriptions.

 

Other probs:

  • Feature creep - becoming too complex, all things to all people (actually growing imperfect to all)
  • Keeping people on a dying ship.

 

See also

 

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