Product life-cycle management (marketing)

This article is about the commercial term to describe the life of a product in the market. For the engineering term, see Product lifecycle management.

Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages.

Product life-cycle (PLC) Like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert three things:

• Products have a limited life,
• Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller,
• Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The four main stages of a product's life cycle and the accompanying characteristics are:

Stage	Characteristics
1. Market introduction stage	costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage
2. Growth stage	costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market increased competition leads to price decreases
3. Maturity stage	costs are lowered as a result of production volumes increasing and experience curve effects sales volume peaks and market saturation is reached increase in competitors entering the market prices tend to drop due to the proliferation of competing products brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down
4. Saturation and decline stage	costs become counter-optimal sales volume decline prices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales

Request for deviation

In the process of building a product following defined procedure, an RFD is a request for authorization, granted prior to the manufacture of an item, to depart from a particular performance

Market identification

Termination is not always the end of the cycle; it can be the end of a micro-entrant within the grander scope of a macro-environment. The auto industry, fast-food industry, petro-chemical industry, are just a few that demonstrate a macro-environment that overall has not terminated even while micro-entrants over time have come and gone. Products need to be recognised in the market based upon the characteristics it has.

Lessons of the PLC

It is claimed that every product has a life period, it is launched, it grows, and at some point, may die. A fair comment is that – at least in the short term – not all products or services die. Jeans may die, but clothes probably will not. Legal services or medical services may die, but depending on the social and political climate, probably will not.

Limitations

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.

See also

• Product management
• New product development
• Software product management
• Technology lifecycle
• Product lifecycle management
• Material selection
• Toolkits for user innovation
• Application lifecycle management
• Obsolescence
• Diminishing manufacturing sources and material shortages (DMSMS)
• Planned obsolescence
• Product teardown

References

• Box, J. (1983) Extending product lifetime: Prospects and opportunities, European Journal of Marketing, vol 17, 1983, pp 34–49.
• Day, G. (1981) The product life cycle: Analysis and applications issues, Journal of Marketing, vol 45, Autumn 1981, pp 60–67.
• Levitt, T. (1965) Exploit the product life cycle, Harvard Business Review, vol 43, November–December 1965, pp 81–94.
• Dhalla, N.K., Yuspeh, S. (1976) Forget the product life cycle concept, 'Harvard Business Review', Jan–Feb 1976
• Rey F.J., Martín-Gil J., Velasco E. et al.(2004) Life Cycle Assessment and external environmental cost analysis of heat pumps, Environmental Engineering Science, vol 21, September 2004, pp 591–605
• Westkämper, E. (2000) Live Cycle Management and Assessment. Approaches and Visions Towards Sustainable Manufacturing, Annals of the CIRP, Vol. 49/2/2000, p. 501–522

External links

• Public Works and Government Services Canada