Significance of Product Life Cycle

The idea of product life-cycle features that sooner or later all products pass away and that if management wishes to support its income, it must replace the declining products with the new ones. The product life-cycle concept indicates as to what should be expected in the market for a fresh product at various stages. i. e. , intro, development, maturity and decrease. Thus, the idea of product life-cycle can be utilized as a forecasting tool. It could notify management that its product will undoubtedly face saturation and drop, and the number of problems these periods pose. The product life-cycle is also a good framework for describing the typical evolution of marketing strategy over the phases of product life-cycle. This can help in taking sensible marketing decisions at different phases of the product life-cycle.

After a product has been developed, it is launched on the market by using various promotional devices such as advertising, sales advertising, promotion and paresonal advertising. In other words, product development must be accompanied by the successful launch of the product in the market. For this, planning for introduction of the product starts during the process of product development itself. Every firm makes deal projections during intro, progress and maturity level of the product life-cycle. To acheive the projected sales focus on, it formulates promotional, costing and distribution procedures. Thus, the idea of product life-cycle helps integrated marketing guidelines associated with product, price, place and campaign/distribution.

The features of PLC to a firm are as follows
  • When the merchandise life-cycle is predictable, the management must be mindful in taking move forward steps before the decline level, by adopting product modification, rates strategies, style, quality, change, etc.
  • The company can prepare an effective product plan by knowing the product life-cycle of a product.
  • The management can find new uses of the merchandise for the growth of market during development stage as well as for stretching the maturity level.
  • The management can choose latest scientific changes to increase the product quality, features and design.

STAGES IN PRODUCT LIFE-CYCLE

Product life routine comprises four periods

Introduction stage

Growth stage

Maturity stage

Decline stage

product-life-cycle-stages-plc

Fig 1: product life-cycle

Product Life Pattern (PLC)

Introduction stage

EXAMPLES FROM DIFFERENT SECTORS

http://www. ithappensinindia. com/wp-content/uploads/2010/09/BPL-Television. jpg BPL TELEVISIONS

Many products generally have a characteristic known as 'perishable distinctiveness". This means that something which is distinctive when new degenerates through the years into a commodity. The procedure by which the distinctiveness little by little disappears as the merchandise merges with other competitive products, has been rightly termed by Joel Dean as "the routine of competitive degeneration". The routine commences with the invention of a fresh product which is often accompanied by patent protection, and additional development to make it saleable. This is usually followed by an instant growth in its sales as the merchandise gains market acceptance. Then competitors get into the field with imitation and rival products and the distinctiveness of the new product starts diminishing. The acceleration of degeneration differs from product to product. Although some products are unsuccessful immediately on beginning or just a little later, others may live long enough. BPL's picture in picture TV was removed at the release level itself. The innovation of a new product and its degeneration into a common product is termed as the life cycle of something.

There are five distinct stages in the life span cycle of a product as shown below

Introduction. Research or executive skill brings about product development. The product is placed on the market; consciousness and acceptance are minimal. A couple of high promotional costs. Sometimes something may generate a new demand, for example, Maggi. Level of sales is low and there may be heavy losses.

Growth. The product begins to make swift sales gains due to cumulative ramifications of introductory promotion, distribution, and word-of-mouth affect. High and sharply growing profits may be witnessed. But to preserve development, consumer satisfaction must be made certain at this stage.

Maturity. Sales development proceeds, but at a diminishing rate, due to declining number of prospects who remain unacquainted with the product or who have used no action. Also, the last of the unsuccessful competing brands will probably withdraw from the market. Because of this, sales are likely to continue to go up as the customers for the withdrawn brands are mopped up by the survivors. There is no improvement in the merchandise but changes in offering effort are normal. Profit margins slip despite rising sales.

Saturation. Sales reach and remain on a plateau marked by the amount of replacement demand. You can find little additional demand to be activated.

Decline. Sales commence to diminish absolutely as the clients begin to wheel of the product and the merchandise is steadily edged out by better products or substitutes, for example, dial telephones and petrol jeeps.

http://www. mbaknol. com/wp-content/uploads/2010/06/product-life-cycle. jpg

Time

Fig 2: product life-cycle of BPL TV's

There are several reasons why the life-cycle of something tends to be brief : (a) continuous research for product development, (b) simultaneous attempts by several companies in the same course, and (c) inclination of a new idea to attract competitors. Improvements proposed by one company are likely to be met and, when possible, exceeded by rivals in a relatively short period. In case a competitor hits after a real improvement (perhaps predicated on an completely new technology) and he markets it well, both sales and profits of the original technology) and he markets it well, both profits of the initial product innovator may decline drastically.

It may be noted that products may start a new pattern or revert to an early on stage therefore of (a) the finding of new uses, (b) the appearance of new users, and (c) benefits of new features.

As the distinctiveness of the merchandise fade, the costs discretion liked by their makers gradually declines. This is what happened regarding many products like ball-point pens, transistors, radios, etc. Through the entire cycle, changes happen in cost and promotional elasticity of demand as also in the creation and distribution costs of the product. Pricing insurance policy, therefore, must be tweaked over the many stages of the cycle.

Product life-cycle concentrates only the life-cycle of something you start with its introduction in to the market to the post-marketing period. However, some processes are to be performed by the management even before the introduction of something in the market. These procedures include exploration, testing, analysis, development, screening, etc. The concept of product life-cycle can be utilized as a managerial tool.

Marketing strategies, however, need to be changed with changes in the period of the life-cycle of something. An understanding of the cycle is effective to the managers for a logical understanding of the future sales activities as also planning of marketing strategies. Hence, PLC is synonymous with the pattern of demand for a product over time.

The amount of time a product spends at anyone stage varies from product to product. Something might not go through every stage in the pattern. Some products, for example, might not see through the introductory level, while others might not see through the expansion or even the maturity stage. There might be still other products that may go through the launch to maturity stages but usually takes a longer time to reach the saturation level and hence might take a longer period to attain the decline stage. Some products, for instance, might not get past the maturity stage. There could be still other products that might go through the introduction to maturity levels but might take a longer time to attain the saturation level and hence might take a longer time to reach the decline stage. Some products may hustle through the complete cycle in an amazingly short period. In certain cases, there could even be a repositioning of something, which might result in off a fresh growth cycle.

http://www. dineshbakshi. com/phocadownload/product-life-cycle. jpg

Fig 3: product life-cycle of Facebook

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)