Product Life
Cycle
Product lifecycle goes through many phases
and involves many professional disciplines and requires many skills,
tools and processes. 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.
Product life cycle (PLC)
is to do with the life of a product in the market with respect to business/commercial
costs and sales measures; whereas Product Lifecycle Management (PLM)
is more to do with managing descriptions and properties of a product
through its development and useful life, mainly from a business/engineering
point of view.
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
It is claimed that every product has a life cycle. It is launched, it
grows, at some point, may die. A fair comment is that - at least in
the short term - not all products/services die. Jeans may die, but clothes
probably won't. Legal services, medical services, may die, but depending
on a social political climate, probably won't.
Even though its validity
is questionable, it can offer 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 in front of
them.
The most important aspect
of product life-cycles is, however, that - even under normal conditions
- to all practical intents and purposes they often do not exist (hence,
there needs to be more emphasis on model/reality mappings). 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 monopolize many markets, is therefore
one of continuity.
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 organizations involved.
It, thus, offers little of practical value for most marketers. Even
if the PLC (and the related PLM support) 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 limited), and will
not encompass the whole range from growth to decline.
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