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The conditions a Product is sold under will change over time. The Product Life Cycle refers to the succession of stages a product goes through. '''Product Life Cycle Management''' is the succession of strategies used by management as a product goes through its life cycle. THE STAGES Products tend to go through five stages: # New Product Development stage
# Market introduction stage
# Growth stage
# Mature stage
# Decline stage
MANAGEMENT OF THE CYCLE The progression of a product through these stages is by no means certain. Some products seem to stay in the mature stage forever (e.g., milk). Marketers have various techniques designed to prevent the process of falling into the decline stage. In most cases however, one can estimate the life expectancy of a product category. Marketers' Marketing Mix strategies change as their products goes through their life cycles. Advertising , for example, should be informative in the introduction stage, persuasive in the growth and maturity stages, and be reminder-oriented in the decline stage. Promotional budgets tend to be highest in the early stages, and gradually taper off as the product matures and declines. Pricing , Distribution , and product characteristics also tend to change. Customers respond to new products in different ways. Diffusion Of Innovations theory, pioneered by Everett Rogers , and other Diffusion Models posit that people have different levels of readiness for adopting new innovations and that the characteristics of a product effect overall adoption. Microsoft has publicly released the dates at which its various products will be discontinued or unsupported, even before they are released. The first two stages, introduction and growth, are often seen as offensive in nature. The second two stages, mature and decline stage, are often seen as defensive in nature. The defensive stage is sometimes called the armadillo phase because of that animal's defensive technique of hiding in its shell. MARKET EVOLUTION Market Evolution is a process that parallels the product life cycle. As a product category matures, the industry goes through stages that mirror the five stages of a product life cycle: # Market Crystallization - latent demand for a product category is awakened with the introduction of the new product # Market Expansion - additional companies enter the market and more consumers become aware of the product category # Market Fragmentation - the industry is subdivided into numerous well populated competitive groupings as too many firms enter # Market Consolidation - firms start to leave the industry due to stiff competition, falling prices, and falling profits # Market Termination - consumers no longer demand the product and companies stop producing it TECHNOLOGY LIFE CYCLE The underlying technology subsumed within a product or product category can go though similar stages. This is typically referred to as the Technology Lifecycle . LESSONS OF THE PRODUCT LIFE CYCLE (PLC) Every product or service must, almost by definition, have a life cycle. It is launched, it grows, then it dies. As such, it offers a useful 'model' for managers to keep at the back of their mind. Indeed, if their products are in the introductory or growth phases, or in that of decline, it perhaps should be at the front of their mind; for the predominant features of these phases may be those revolving around such life and death. Between these two extremes, it is salutary for them to have that vision of mortality on front of them. The most important aspect of product life-cycles is, however, that to all practical intents and purposes they often do not exist! In most markets the majority of the major (dominant) brands have held their position for at least two decades. The dominant product life-cycle, that of the brand leaders which almost monopolise many markets, is therefore one of continuity! In the most respected criticism of the product life cycle, Dhalla & Yuspeh state; "...clearly, the PLC is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand's life cycle." Thus, the life cycle may be useful as a description, but not as a predictor; and usually should be firmly under the control of the marketer! The important point is that in many, if not most, markets the product or brand life cycle is significantly longer than the planning cycle of the organisations involved. It, thus, offers little of practical value for most marketers. Even if the PLC exists for them, their plans will be based just upon that piece of the curve where they currently reside (most probably in the 'mature' stage); and their view of that part of it will almost certainly be 'linear', and will not encompass the whole range from growth to decline. SEE ALSO
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