Product Life Cycle - Revision history

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 *Impact of External Forces – The PLC assumes customers’ decisions are primarily impacted by the marketing activities of the companies selling in the market. In fact, as we discussed in the Managing External Forces Tutorial, there are many other factors affecting a market, which are not controlled by marketers. Such factors (e.g., social changes, technological [[innovation]]) can lead to changes in market demand at rates that are much more rapid than would occur if only an organization’s marketing decisions were being changed (i.e., if everything was held constant except for company’s marketing decisions).
 *Use for [[Forecasting]] – The impact of external forces may create challenges in using the PLC as a forecasting tool. For instance, market factors not directly associated with the marketing activities of market competitors, such as economic conditions, may have a greater impact on reducing demand than customers’ interest in the product. Consequently, what may be forecast as a decline in the market, signaling a move to the Maturity stage, may be the result of declining economic conditions and not a decline in customers’ interest in the product. In fact, it is likely demand for the product will recover to growth levels once economic conditions improve. If a marketer follows the strict guidance of the PLC he/she would conclude that strategies should shift to those of the Maturity stage. Doing so may be an overreaction that could hurt market position and profitability.
-*Stages Not Seamlessly Connected – Some high-tech marketers question whether one stage of the PLC naturally will follow another stage. In particular, technology [[consultant]] Geoffrey Moore suggests that for high-tech products targeted to business customers, a noticeable space or “chasm” occurs between the Introduction and Growth stages that can only be overcome by significantly altering marketing strategy beyond what is suggested by the PLC.
+*Stages Not Seamlessly Connected – Some high-tech marketers question whether one stage of the PLC naturally will follow another stage. In particular, technology consultant Geoffrey Moore suggests that for high-tech products targeted to business customers, a noticeable space or “chasm” occurs between the Introduction and Growth stages that can only be overcome by significantly altering marketing strategy beyond what is suggested by the PLC.

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 **Product features may be enhanced to differentiate the product from that of competitors.
 **Pricing may be lower because of the new competition.
-**Distribution becomes more intensive and [[incentives]] may be offered to encourage preference over competing products.
+**Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
 **Promotion emphasizes product differentiation.
 *Decline Stage: As sales decline, the firm has several options:

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 *Information: Whether it’s data about the potential market that will make a new product viable, feedback about different marketing campaigns to see which are most effective, or monitoring the growth and eventual decline of the market in order to decide on the most appropriate response, information is crucial to the success of any product. Manufacturers that efficiently manage their products along the product life cycle curve are usually those that have developed the most effective information systems.
 Most manufacturers accept their products will have a limited life. While there may not be much they can do to change that, by focusing on the key business areas mentioned, product life cycle management allows them to make sure that a product will be as successful as possible during its life cycle stages, however long that might be.
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 *Typewriters: Typewriters, and even electronic word processors, have very limited functionality. With consumers demanding a lot more from the electronic equipment they buy, typewriters are a product that is passing through the final stage of the product life cycle.
 While it’s usually left up to the manufacturers and their marketers to worry about Product Life Cycle Management and what implications the different stages might have for their business, considering actual products is a good way to show consumers the part they play in this life cycle.
 == See Also ==

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 *The product life cycle : a critical look at the literature [https://www.ideals.illinois.edu/bitstream/handle/2142/28718/productlifecycle1336gard.pdf?sequence=1 David M. Gardner]
 *Exploit the Product Life Cycle [https://hbr.org/1965/11/exploit-the-product-life-cycle Theodore Levitt]
 *Application of late-stage product life cycle strategies by the medical device Industry - Thesis [https://www.researchgate.net/publication/301695359_Application_of_late-stage_product_life_cycle_strategies_by_the_medical_device_Industry Kashif Ikram]
 *The Product Life Cycle: Analysis and Applications Issues [https://journals.sagepub.com/doi/abs/10.1177/002224298104500408?journalCode=jmxa George S Day]

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 **Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
 **Promotion emphasizes product differentiation.
-*Decline Stage:As sales decline, the firm has several options:
+*Decline Stage: As sales decline, the firm has several options:
 **Maintain the product, possibly rejuvenating it by adding new features and finding new uses.
 **Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.
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 [[File:PLC_Table.png|400px|Product Life Cycle Stages Table]]<br />
 source: Patriot Software
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 == Further Reading ==

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 **Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
 The [[Marketing Mix 4P's 5P's|marketing mix]] decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.
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 *Typewriters: Typewriters, and even electronic word processors, have very limited functionality. With consumers demanding a lot more from the electronic equipment they buy, typewriters are a product that is passing through the final stage of the product life cycle.
 While it’s usually left up to the manufacturers and their marketers to worry about Product Life Cycle Management and what implications the different stages might have for their business, considering actual products is a good way to show consumers the part they play in this life cycle.

← Older revision		Revision as of 17:32, 10 September 2019
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	== How Product Life Cycles Work<ref>How Product Life Cycles Work [https://www.investopedia.com/terms/p/product-life-cycle.asp Investopedia]</ref> ==		== How Product Life Cycles Work<ref>How Product Life Cycles Work [https://www.investopedia.com/terms/p/product-life-cycle.asp Investopedia]</ref> ==
	A product begins with an idea, and within the confines of modern business, it isn't likely to go further until it undergoes research and development and is found to be feasible and potentially profitable. At that point, the product is produced, marketed, and rolled out. The product introduction phase generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits. Assuming the product is successful, it enters its growth phase. Demand grows, production is increased, and its availability expands. As a product matures, it enters its most profitable stage, while the costs of producing and marketing decline. However, it inevitably begins to take on increased competition as other companies emulate its success, sometimes with enhancements or lower prices. The product may lose market share and begin its decline. The stage of a product's life cycle impacts the way in which it is marketed to consumers. A new product needs to be explained, while a mature product needs to be differentiated from its competitors.		A product begins with an idea, and within the confines of modern business, it isn't likely to go further until it undergoes research and development and is found to be feasible and potentially profitable. At that point, the product is produced, marketed, and rolled out. The product introduction phase generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits. Assuming the product is successful, it enters its growth phase. Demand grows, production is increased, and its availability expands. As a product matures, it enters its most profitable stage, while the costs of producing and marketing decline. However, it inevitably begins to take on increased competition as other companies emulate its success, sometimes with enhancements or lower prices. The product may lose market share and begin its decline. The stage of a product's life cycle impacts the way in which it is marketed to consumers. A new product needs to be explained, while a mature product needs to be differentiated from its competitors.
		+
		+
		+	== Product Life Cycle (PLC) Stages<ref>Product Life Cycle Stages Explained [http://www.quickmba.com/marketing/product/lifecycle/ Quick MBA]</ref> ==
		+	A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the graph below:
		+
		+
		+	[[File:PLC.gif\|400px\|Product Life Cycle Stages]]<br />
		+	source: Quick MBA
		+
		+
		+	*Introduction Stage: In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
		+	**Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained.
		+	**Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
		+	**Distribution is selective until consumers show acceptance of the product.
		+	**Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
		+	*Growth Stage: In the growth stage, the firm seeks to build brand preference and increase market share.
		+	**Product quality is maintained and additional features and support services may be added.
		+	**Pricing is maintained as the firm enjoys increasing demand with little competition.
		+	**Distribution channels are added as demand increases and customers accept the product.
		+	**Promotion is aimed at a broader audience.
		+	*Maturity Stage: At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
		+	**Product features may be enhanced to differentiate the product from that of competitors.
		+	**Pricing may be lower because of the new competition.
		+	**Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
		+	**Promotion emphasizes product differentiation.
		+	*Decline Stage:As sales decline, the firm has several options:
		+	**Maintain the product, possibly rejuvenating it by adding new features and finding new uses.
		+	**Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.
		+	**Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
		+	The [[Marketing Mix 4P's 5P's\|marketing mix]] decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.