Product Life Cycle (PLC) is an important concept in marketing. It describes the process a product undergoes from its discovery to its final removal from the market. However, not all the goods reach the final stage. In fact, some continue to grow, but others rise and fall. Some products also stay longer than others in one stage. For instance, during 1992, Pepsi Company developed clear Pepsi products that went from the introduction to decline at an unprecedented rate. Similarly, new computer hardware products, software applications, and video games tend to have a shorter PLC when compared to durable goods, which tend to have a longer PLC. Consequently, different products have varying PLC. The promotion of a product, its price, distribution, and modification can also change throughout its lifecycle. Products typically go through the four stages, and each stage differs from othrs and requires unique marketing strategies. The current paper explains the steps in the PLC and how the marketers can prolong the lives of products in the maturity or decline stages and move the commodity back into the growth phase.
Steps in the PLC
Step 1: Introduction
This is the first stage in the PLC. It involves introducing new and previously unknown products to the buyers. Moreover, the sales in this stage are small, with the new production process and the realized cost reductions through economies of size. Conversely, marketing costs are higher compared to other stages. In the introduction step, aggressive marketing is a paramount requirement in order to enhance the awareness of the product and to influence consumers to buy it. Also, supply chains are useful in this phase as they help to deliver the product to customers. According to Kobayashi, commodities in the introduction stage have lower productivity because of the high costs associated with research and development needed to launch them. The duration of the introduction stage may differ for various products. During the introduction, a company must have sufficient distribution outlets. The quantities of the product must also be available to meet its demand. For example, an International Business Machines (IBM) product, ThinkPad, was very popular during its introduction, but its demand was so high that IBM was unable to manufacture enough of the product.
Step 2: Growth
After consumers accept the product, it progresses into the growth phase, which is characterized by growing sales volumes, intensification of competition, and an increase in profits. However, a disadvantage of the growth phase is that the popularity of the product in the marketplace attracts more competitors . In addition, a firm may not be in a position to meet the increasing demand for the product. For instance, the developers of Nintendo’s Wiis, a video game console, were unable to meet the demand after the launch of the product. Consequently, competing products such as Microsoft Xbox served to address this demand gap, heightening competition.
Step 3: Maturity
After the entry of several rival firms coupled with the decrease in the number of prospective new customers, the sales of a product starts to stagnate, which is an indication of the maturity phase of the product. Therefore, in this step, the market becomes saturated since the production matches the demand and the demand growth slows precipitously. In addition, there are few first-time buyers. Competition also becomes intense resulting in aggressive promotion to maintain the market share. Although experience curves and size economies in growth stage are achieved, extreme pricing programs lead to smaller profit margins. Later, the products become standardized. Additionally, the maturity stage lasts longer than the other ones. Examples of the products in the maturity stage is the Quaker Oats and Ivory Soap since they have been in the market for more than ten decades.
Step 4: The Decline
In this stage, the consumers shift to other products resulting in a drop in sales. There exists intense rivalry among the competitors. In this manner, the profits decrease due to narrow gain margins, lowering the sales. Most industries become non-operational in decline stage in terms of production, distribution, and other business activities. As a result, the remaining companies try to revive the interest in the product. The success in this renewal may influence the sales growth. If not, the sales stabilize and decline continuously. Many technical products are in the decline phase because of technological advances that render them obsolete. Examples include video cassettes, which has been faced by digital video discs.
Prolonging the Lives of Products
Marketers can prolong the lives of their products that have reached the maturity phase or are in the decline phase of the PLC. Sometimes, marketers even move these products back into the growth phase. With respect to this statement, the firm owners reduce or stop marketing efforts and expenses in the decline phase of product life cycle. An effective strategy is to lower marketing efforts to discourage the competitors. Along these lines, it is possible to obtain the competitors’ market share if the company keeps selling the product while the competitors stop selling. In this way, marketers hope that rival firms will stop offering their products in order to boost the demand. Moreover, marketers can prolong the PLC by ensuring that customers consume the product in larger quantities. Alternatively, updating the product features, price promotion and advertisement to encourage people who do not buy the company’s product to try it also prolongs the lives of the items, particularly in the maturity stage.
Because of technological improvements, fashion trends, disruptive innovation and change of consumer preferences, product sales are bound to plummet at some point. To this end, it is crucial to reduce the cost of the finished good. Devising another use for the product can also help in prolonging the PLC. This can be achieved by focusing on a niche market. Instead, other marketers prefer discontinuing the production when the firm’s gain disappears or when a successor product is unveiled, especially in decline stage. Occasionally, it happens that a product in the maturity or decline stage can move back to the growth stage. It occurs when there is rapid increase in the sales as a result of technological advancements that boosts the advertisement of the product. Thereby, buyers are acquainted with the commodity and are able to buy it. Another way pertaining to the shift in the stages is little rivalry resulting from the rapid growth of the business despite the fact that the competitors may enter the market. Additionally, cost reductions as the enterprise moves down the experience curve with the realization of economies of size can also lead to the stage change.
The PLC helps an industry to understand the stages a product goes through once it is identified. The PLC comprises four steps, which are introduction, growth, maturity and decline. Marketers can prolong the PLC through various ways including reducing marketing efforts in order to discourage competitors, updating product features, lowering the cost of the finished product, and finding another usage for the merchandise by targeting niche customers.
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