Chapter 3: Product Life Cycle in Theory and Practice
1, the
Introduction:
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, and thus every
product has life cycle
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.
Chapter Objectives:
Explain the nature of PLCs and the stages
associated with them;
Understand the concept of product
cannibalization;
Be familiar with the criticisms made of the PLC
concept; and
Be aware of and be able to explain variants of the
classic life cycle.
THE PRODUCT LIFE CYCLE
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:
Figure 3.1. Product Life Cycle Diagram
Conventionally, and as presented in Figure 3.
product life cycle is conceived of as having four
stages Introduction, Growth, Maturity and Decline.
In this section of our study we shall be concerned
with the stretched PLC consisting of seven stages
by adding Gestation before the Introduction Stage;
by including Saturation between Maturity and
Decline; and by adding a final stage of Elimination.
The stretched PLC is shown in Figure 3.2
Figure 3.2 Stretched PLC
In terms of emphasis we stress the Gestation of New
Product Development phase, the Introduction or
Launch Phase, and the Elimination Phase. The reason
for this emphasis is that not only does it reflect the
research interests of the authors but it
acknowledges the fact that most marketing
management books concentrate on the
Growth/Maturity phases as these represent the
areas where most marketing activity occurs, i.e the
source of most revenue and profit. It is also the
principal focus of the marketing management
function.
PLC can be used as forecasting tools, but only when
one has a considerable amount of information about
the product and the market into which the product
is to be introduced. In the present context,
however, the relevance of the PLC is that it is a
constant reminder of the inevitability of changes and
does mirror the stages through which all successful
products pass.
THE SEVEN STAGES OF THE PRODUCT LIFE CYCLE
Stage One: Gestation (New Product Development)
Product development phase begins when a company
finds and develops a new product idea. This involves
translating various pieces of information and
incorporating them into a new product. A product is
usually undergoing several changes involving a lot of
money and time during development, before it is
exposed to target customers via test markets. Those
products that survive the test market are then
introduced into a real marketplace and the
introduction phase of the product begins. During the
product development phase, sales are zero and
revenues are negative. It is the time of spending with
absolute no return.
As a consequence of accelerating technological
change and increased competition, firms have found
it necessary to introduce more and more new
products in an effort to distinguish themselves from
their competitors and gain competitive advantage.
Two consequences follow almost automatically -
many new products are stillborn or survive for only a
short period of time, and the average product life
cycle is shortening as successful new products
displace the old. This in turn, has two main effects
on marketing management. First, there is a need to
accelerate the actual time taken to develop new
product the so called time to market issue.
Second, there is the need to get it right first time
through a process of Total Quality Management.
Of course, the ideal is to be on time and on budget
with a product which precisely meets the intended
customers needs: the goal of the processes,
procedures and techniques. But having said that, it
has to be recognized that few if any managers are
blessed with perfect foresight and there is no known
market research technique which can guarantee
100% accuracy in predicting how an intended market
will actually respond to a new product. It follows
that the firm which launches a less than perfect
product, but which has the capability to respond
quickly and effectively to customer reactions and
feedback, may well outperform the perfectionist
organization which takes much longer to get to the
market.
Stage Two: Introduction (Launch)
When a new product is introduced to the market,
sales volumes are normally not very high. The
volume will normally only increase once a number of
potential customers become aware of the product
and the benefits it has for them.
During the introduction stage the strategic goal
normally includes to acquire a strong market
position.
The goal in respect of the competition dimension is
to prevent the early entry of aggressive competitors
into the market segment.
During the introduction stage of the life cycle, most
companies will endeavor to build product awareness
and establish a market for the product. The impact
on the marketing mix is as follows:
1. The product strategy will normally be to
have a limited number of variations of the
product in order not to confuse the early
adopters. During this stage establishing the
product brand and quality level in the
market is imperative. The establishment of
intellectual property protection such as
patents and trademark registration is
important aspects to remember.
2. An aggressive pricing policy to maximize
market penetration is very common during
this phase of the life cycle. If market share is
built rapidly the development cost can be
removed later. In cases where development
cost was high and the life cycle is expected
to be short high skim pricing to recover
development costs is normally a suitable
strategy during this phase.
3. The promotion strategy is normally aimed
at innovators and early adopters. Marketing
communications will focus on establishing a
definite product identity to ensure that the
market awareness is maximized. Potential
buyers are made aware of the new product,
its features, uses, benefits and advantage in
order to entice them to buy it.
4. During the introduction phase an exclusive
and selective distribution strategy that is
aimed at focused distribution channels is a
common strategy in order to ensure that
the product is available at the correct place
for the early adopters. The creation of high
profit margins for middle men is also an
important component of the distribution
strategy for this stage.
5. In cases where the barrier to entry is low it
may be more appropriate to have a more
extensive and comprehensive distribution
strategy to cover as wide a market as
possible early on in the life cycle of the
product.
During the introduction stage, the most important
objective is to establish a market and establish a firm
initial demand for the product. The marketing
communication cost is by and large quite high during
this stage of the product life cycle. This is as a result
of the need to increase customer awareness of the
product rapidly and to ensure that the early
adopters are targeted.
During the introductory stage a company is normally
also expected to incur extra costs associated with
the establishment of the initial distribution channels
of the product due to the initial inefficiencies that
normally exists.
The high level of the extra costs to establish a new
market at the same time as the low sales volume
that is usual for a new product being introduced
normally results in the introduction stage to be a
time where losses is accumulated. This should not
bother the company as these losses are normally
more than recovered in the next phase provided that
the correct marketing strategies are followed during
this introduction stage.
Stage Three: Growth
As demand increases, economies of scale will
become possible and better prices can be offered.
This stage can also be recognized by a rapid increase
in sales with profits reaching a peak before it starts
to decline.
The emergence of competitors during this stage is
the biggest threat to the survival of the product. To
counter this and maintain the growth for as long as
possible the marketing function should focus on the
basic features of the product and any additional
features that may be added. The primary focus
should be to build the brand and get consumers to
prefer and choose the product as a result of the
brand. The idea is to get some customers to make
repeat purchases as a result of the brand
recognition.
The phase also lends itself to an increase in the
distribution channels in order to make the product
available to a more extensive audience, thus
expanding the market base. Growth stage is
characterized by the following:
 1. Sales increase rapidly during the growth
phase. This increase is due to: (1)
consumers rapidly spreading positive word-
of-mouth (WOM) about the product; (2) an
increasing number of competitors enter the
market with their own versions of the
product; (3) and a "promotion effect" which
is the result of individual firms employing,
advertising and other forms of promotion
to create market awareness, stimulate
interest in the product, and encourage trial.
2. Cost are declining on a per unit basis
because increased sales lead to longer
production runs and, therefore, scale
economies in production. Similarly firms
may experience curve effects which help to
lower unit variable costs.
3. Because sales are increasing and, at the
same time, unit cost are declining, profits
rise significantly and rapidly during this
stage.
4. Customers are mainly early adopters and
early majority. It is the early adopter,
specifically, that is responsible for
stimulating the WOM effect. During the
latter part of growth, the first major
segment of the mass market, called the
early majority, enters the market. This
category of consumers is somewhat more
price sensitive and lower on the socio-
economic spectrum. As a result, these
consumers are somewhat more risk averse
and, therefore, somewhat more hesitant to
adopt the product.
5. Competition continues to grow throughout
this stage. As competitors recognize profit
potential in the market, they enter the
market with their own versions of the
product. As competition intensifies,
strategies turn to those that will best aid in
differentiating the brand from those of
competitors. Attempts are made to
differentiate and find sources of
competitive advantage. In addition, firms
identify ways in which the market can be
segmented and may develop focused
marketing strategies for individual
segments.
Stage Four: Maturity
Maturity occurs when the new product has
successfully displaced the product(s) for which it was
a substitute such that all the suppliers of the former
product have now switched to its replacement or
else quit the market. By the maturity stage the
product form will have achieved a state in which it is
capable of little if any further physical development.
The proliferation of the variants so typical of the
growth stage will cease. In maturity, customers
know what they want and the physical attributes of
the product are well known and understood.
Further, market segmentation on the basis of
physical differences and usage becomes difficult in
not impossible.
As a result supplier to the market must look to other
forms of differentiation as the basis for building and
retaining market share. Thus, it is in the maturity
stage that professional marketer is most heavily
engaged in developing and delivering an effective
marketing mix. Competition becomes much more
intense and focused as growth slows down and
sellers struggle to avoid price concessions in an
increasingly difficult market. Non-price competition
based upon promotion, distribution and service
both presales and after sales dominate as supplier
firms jockey for position.
Stage Five: Saturation
Saturation is the advanced stage of maturity. By now
the market has settled down, usually with three or
four major players serving the mass market and a
constellation of small firms meeting the specialist
needs of the minority. The 80/20 or Pareto principle
will usually obtain with a small number of large firms
accounting for 80% of sales and a large number of
small firms accounting for the remaining 20%.
At the saturation stage, sales growth has started to
slow and is approaching the point where the
inevitable decline will begin. Defending market share
becomes the chief concern, as marketing staffs have
to spend more and more on promotion to entice
customers to buy the product. Additionally, more
competitors have stepped forward to challenge the
product at this stage, some of which may offer a
higher quality version of the product at a lower
price. This can touch off price wars, and lower prices
mean lower profits, which will cause some
companies to drop out of the market for that
product altogether.
During this period new brands are introduced even
when they compete with the companys existing
product and model changes are more frequent
(product, brand, model). This is the time to extend
the products life. Pricing and discount policies are
often changed in relation to the competition policies
i.e. pricing moves up and down accordingly with the
competitors one and sales and coupons are
introduced in the case of consumer products.
Promotion and advertising relocates from the scope
of getting new customers, to the scope of product
differentiation in terms of quality and reliability. The
battle of distribution continues using multi
distribution channels. A successful product maturity
phase is extended beyond anyones timely
expectations. A good example of this is Tide
washing powder, which has grown old, and it is still
growing.
Stage Six Decline:
This occurs when the product peaks in the maturity
and saturation stage and then begins a downward
slide in sales. Eventually, revenues will drop to the
point where it is no longer economically feasible to
continue making the product. Investment is
minimized. The product can simply be discontinued,
or it can be sold to another company. A third option
that combines those elements is also sometimes
seen as viable, but comes to fruition only rarely.
Under this scenario, the product is discontinued and
stock is allowed to dwindle to zero, but the company
sells the rights to supporting the product to another
company, which then becomes responsible for
servicing and maintaining the product.
This stage is distinguished by a reduction in market
share, declining popularity of the product and falling
profits. The decision regarding the future of the
product should be carefully considered. This may
include continuing with the product as it is, to
revitalize the product or to withdraw it from the
product offering. One can only justify continuing
with the current unchanged product as long as it
makes a contribution to profits or enhances the
success of the other products in the product mix.
This stage is characterized by:
1. Sales continue to deteriorate through
decline. And, unless major change in
strategy or market conditions occur, sales
are not likely to be revived. Costs, because
competition is still intense, continue to rise.
Large sums are still spent on promotion,
particularly sales promotions aimed at
providing customers with price concessions.
2. Profits, as expected, continue to erode
during this stage with little hope of recovery.
3. Customers are primarily laggards.
4. There generally are a significant number of
competitors still in the industry at the
beginning of decline. However, as decline
progresses, marginal competitors will flee
the market. As a result, competitors
remaining through decline tend to be the
larger more entrenched competitors with
significant market shares.
Stage Seven: Elimination
This new stage of the product life cycle has been
added to recognize that while change is inevitable
and most, if not all, products have finite lives,
evolution is about the survival of the fittest and the
role of management is to ensure the survival of the
species. In this analogy, of course, the species is the
firm and only if it is a single product firm will survival
of the firm and product be the same thing. Usually it
is not, for, implicitly or explicitly, firms recognize and
understand the implications of the PLC and so seek
to develop a portfolio of products each at different
stages of their individual life cycle. However, it is
sufficient to recognize that the
elimination/withdrawal of a product needs to be just
as much a conscious and considered decision as was
its introduction and launch.
This is the time to start withdrawing variations of the
product from the market that are weak in their
market position. This must be done carefully since it
is not often apparent which product variation brings
in the revenues. The prices must be kept competitive
and promotion should be pulled back at a level that
will make the product presence visible and at the
same time retain the loyal customer. Distribution
is narrowed. The basic channel is should be kept
efficient but alternative channels should be
abandoned.
PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE :
PRODUCT CANNIBALISM
Product cannibalization occurs when a company
decides to replace an existing product and introduce
a new one in its place, regardless of its position in
the market (i.e. the products life cycle phase does
not come into account). This is due to newly
introduced technologies and it is most common in
high tech companies. As all things in life there is
negative and positive cannibalization.
In the normal case of cannibalization, an improved
version of a product replaces an existing product as
the existing product reaches its sales peak in the
market. The new product is sold at a high price to
sustain the sales, as the old product approaches the
end of its life cycle. Nevertheless there are times
that companies have introduced a new version of a
product, when the existing product is only starting to
grow. In this way the company sustain peak sales all
the time and does not wait for the existing product
to enter its maturity phase. The trick in
cannibalization is to know when and why to
implement it, since bad, late or early cannibalization
can lead to bad results for a company sales.
UNFAVORABLE CANNIBALIZATION
Cannibalization should be approached cautiously
when there are hints that it may have an
unfavorable economic effect to the company, such
as lower sales and profits, higher technical skills and
great retooling. The causes of such economic
problems are given below.
1. The new product contributes less to profit
than the old one: When the new product is
sold at a lower price, with a resulting lower
profit than the old one, then it does not
sufficiently increase the companys market
share or market size.
2. The economics of the new product might
not be favorable: Technology changes can
force a product to be cannibalized by a
completely new one. But in some cases the
loss of profits due to the cannibalization is
too great. For example a company that
produced ready business forms in paper
was forced to change into electronic forms
for use in personal computers. Although the
resulting software was a success and yield
great profits, the sales of the paper forms
declined so fast that the combined profit
from both products, compared to the
profits if the company did not cannibalize
the original product showed a great loss in
profits.
3. The new product requires significant
retooling: When a new product requires a
different manufacturing process, profit is
lower due to the investment in that process
and due to the write-offs linked to retooling
the old manufacturing process.
4. The new product has greater risks: The new
product may be profitable but it may have
greater risks than the old one. A company
cannot cannibalize its market share using a
failed or failing product. This can happen in
high-tech companies that do not
understand enough of a new technology so
that to turn it into a successful and working
product. As a result unreliable product
emerges and replaces a reliable one, that
can increase service costs and as a result
decrease expected profits.
OFFENSIVE CANNIBALIZATION STRATEGIES
Cannibalization favors the attacker and always hurts
the market leader. For companies that are trying to
gain market share or establish themselves into a
market, cannibalization is the way to do it. Also
cannibalization is a good way to defend market
share or size. A usual practice is the market leader to
wait and do not cannibalize a product unless it has
to. It is thought that a company should acquire and
develop a new technology that will produce a newer
and better product than an existing one and then
wait. Then as competitors surface and attack market
share, cannibalization of a product is ripe. Then and
only then quick introduction of a new product into
the market will deter competition, increase profits
and keep market share. But this strategy does not
always work since delays will allow the competition
to grab a substantial piece of the market before the
market leader can react.
DEFENSIVE CANNIBALIZATION STRATEGIES
Controlled cannibalization can be a good way to
repel attackers as deforesting can repel fire. A
market leader has many defensive cannibalization
strategies that are discussed bellow.
1. Cannibalize before competitors do:
Cannibalization of a companys product(s)
before a competitor does, is a defensive
strategy to keep the competitor of being
successful. Timing is the key in this strategy.
Do it too soon and profits will drop, do it
too late and market share is gone.
2. Introduction of cannibalization as a means
of keeping technology edge over
competition: A good strategy is for a
company, that is the market leader, to
cannibalize its products as competitors start
to catch up in terms of technology
advancements. (For example Intel
Corporation cannibalized its 8088
processor in favor of the 80286 after 2
years, the 80286 in favor of the 386 after 3
years, the 386 in favor of the 486 after 4
years, the 486 in favor with the Pentium
after another 4 and so on). So the market
leader dictates the pace and length of a
products life cycle. (In the case on Intel the
replacement of 486 to Pentium took so long
because competitors had not been able to
catch up).
3. Management of cannibalization rate
through pricing: When cannibalization of a
product is decided, the rate at which this
will happen depends on pricing. The price of
the new product should be at a level that
encourages a particular mix of sales of the
old and new product. If the price of the new
product is lower than the price of the old
then cannibalization rate slows down. If the
opposite happens then the cannibalization
rate is increased. Higher prices in new
products can reflect their superiority over
the old ones.
4. Minimization of cannibalization by
introducing of the new product to certain
market segments: Some market segments
are less vulnerable to cannibalization to
others. This is because there is more or less
to lose or gain for each of them. By
choosing the right segment to perform the
cannibalization of a product a company can
gain benefits without loses and acquire
experience on product behavior.
Criticisms of the PLC
As we have seen, the PLC has the ability to offer
marketers guidance on strategies and tactics as they
manage products through changing market
conditions. Unfortunately, the PLC does not offer a
perfect model of markets as it contains drawbacks
that prevent it from being applicable to all products.
Among the problems cited are:
Shape of Curve Some product forms do not
follow the traditional PLC curve. For instance,
clothing may go through regular up and down
cycles as styles are in fashion then out then in
again. Fad products, such as certain toys, may
be popular for a period of time only to see sales
drop dramatically until a future generation
renews interest in the toy.
Length of Stages The PLC offers little help in
determining how long each stage will last. For
example, some products can exist in the
Maturity stage for decades while others may be
there for only a few months. Consequently, it
may be difficult to determine when adjustments
to the Marketing Plan are needed to meet the
needs of different PLC stages.
Competitor Reaction not Predictable As we
saw, the PLC suggests that competitor response
occurs in a somewhat consistent pattern. For
example, the PLC says competitors will not
engage in strong brand-to-brand competition
until a product form has gained a foothold on
the market. The logic is that until the market is
established it is in the best interest of all
competitors to focus on building interest in the
product form itself and not on claiming one
brand is better than another. However,
competitors do not always conform to
theoretical models. Some will always compete
on brand first and leave it to others to build
market interest for the product form.
Arguments can also be made that competitors
will respond differently than what the PLC
suggests on such issues as pricing, number of
product options, spending on declining products,
to name a few.
Impact of External Forces The PLC assumes
customers decisions are primarily impacted by
the marketing activities of the companies selling
in the market. There are many other factors that
can affect 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 marketing
decisions were being changed (i.e., if everything
was held constant except for companys
marketing decisions).
Use for Forecasting The impact of external
forces makes it difficult to use 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
forecasted as a decline in the market signaling a
move to the Maturity stage may in fact 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 they would conclude
that strategies should shift to those of the
Maturity stage. Doing so may be an over-
reaction 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.
While not perfect, the PLC is a marketing tool that
should be well understood by marketers since its
underlying message, that markets are dynamic,
supports the need for frequent marketing planning.
Also, for many markets the principles presented by
the PLC will in fact prove to be very much
representative of the conditions they will face in the
market.
Deviant Cases fads and fashions
As mentioned at a number of places previously, all
life cycles do not conform to the classic S-shaped
curve or U-shaped distribution. It is these deviant
cases which are usually invoked as evidence of the
non-applicability of the PLC concept. The best known
exceptions to the PLC rule are fads and fashions.
Apparel and other consumer products can be
classified by the length of their life cycles. Basic
products such as T-shirts and blue jeans are sold for
years with few style changes. Businesses selling basic
products can count on a long product life cycle with
the same customers buying multiple units of the
same product at once or over time.
The life cycle curves of basic, fashion, and fad
products are pictured below.
Figure 3.3 Life Cycle for Basic and Fashion Products
Fashion product life cycles last a shorter time than
basic product life cycles. By definition, fashion is a
style of the time. A large number of people adopt a
style at a particular time. When it is no longer
adopted by many, a fashion product life cycle ends.
Fashion products have a steep decline once they
reach their highest sales.
The fad has the shortest life cycle. It is typically a
style that is adopted by a particular sub-culture or
younger demographic group for a short period of
time.
The overall sales of basic products are the highest of
the three types of products, and their life cycles are
generally the longest.
Apparel products often have a fashion dimension,
even if it is just color. As fashion features increase in
a product, the life cycle will decrease. Therefore, if
you are designing a fashion product, you will want to
have multiple products in line for introduction as
each fashion product's cycle runs its course.
Some firms build their lines to include basic, fashion,
and fad products in order to maximize sales. For
example, with a sweater line, a business may have
four styles that have classic styling and colors and
are always in the line. Four additional styles may be
modified every two years to include silhouette,
length, and collar changes based on the current
fashion. One or two short-cycle fashion or fad styles
based on breaking trends may be introduced once or
twice a year. Styles that a popular celebrity or sports
hero is wearing are examples of fashion and fad
styles.
We can also look at the number of fashion product
adopters against time.
Five types of consumers emerge at each of the life
cycle stages.
Figure 3.4 Fashion Adoption Consumer Types
Different marketing strategies should be used to
reach each of these consumer types.
Fashion innovators adopt a new product
first. They are interested in innovative and
unique features. Marketing and promotion
should emphasize the newness and
distinctive features of the product.
Fashion opinion leaders (celebrities,
magazines, early adopters) are the next
most likely adopters of a fashion product.
They copy the fashion innovators and
change the product into a popular style. The
product is produced by more companies
and is sold at more retail outlets.
At the peak of its popularity, a fashion
product is adopted by the masses.
Marketing is through mass merchandisers
and advertising to broad audiences.
As its popularity fades, the fashion product
is often marked for clearance, to invite the
 bargain hunters and consumers, the late
adopters and laggards, who are slow to
recognize and adopt a fashionable style.
USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL
PRODUCT LIFE CYCLE
Having said that, it is not clear why many
companies do not consider product
management as a discipline. The answer lies
in the fact that product management is not
taught as engineering or accounting i.e.
does not have formalized training.

Product management is a middle level management Summary

function that can be used to manage a products life
cycle and enables a company to take all the All products and services have certain life cycles. The
decisions needed during each phase of a products life cycle refers to the period from the products first
life cycle. The moment of introduction and of launch into the market until its final withdrawal and
withdrawal of a product is defined by the use of it is split up in phases. During this period significant
product management by a Product Manager. changes are made in the way that the product is
behaving into the market i.e. its reflection in respect
A Product Manager exists for three basic reasons. of sales to the company that introduced it into the
For starters he manages the revenue, profits, market. Since an increase in profits is the major goal
forecasting, marketing and developing activities of a company that introduces a product into a
related to a product during its life cycle. Secondly, market, the products life cycle management is very
since to win a market requires deep understanding important.
of the customer, he identifies unfulfilled customer
needs and so he makes the decision for the The understanding of a products life cycle, can help
development of certain products that match the a company to understand and realize when it is time
customers and so the markets needs. Finally he to introduce and withdraw a product from a market,
provides directions to internal organization of the its position in the market compared to competitors,
company since he can be the eyes and ears of the and the products success or failure.
products path during its life cycle. To improve a
product success during each of its phase of its life Irrespective of whether a product has a normal or
cycle (development - introduction growth deviant life cycle, it is clear that eventually this will
maturity decline), a product manager must uphold come to an end, leading to the death of the industry
the following three fundamentals. responsible for its creation. But, while technologies
may be superseded and replaced, firms strive to
1. Understand how product management survive. To do so it is necessary to anticipate and
works: When responsible for a given new manage change and this means avoiding putting all
product, a product manager is required to your eggs in one basket. To survive the firm needs to
know about the product, the market, the innovate and develop a sequence of new products at
customers and the competitors, so that he different stages in their individual life cycles.
can give directions that will lead to a
successful product. He must be capable of
managing the manufacturing line as well as
the marketing of the product. When the
product manager has no specific authority
over those that are involved in a new
product, he needs to gather the resources
required for the organization to meet
product goals. He needs to know where to
look and how to get the necessary expertise
for the success of the product.
2. Maintain a product / market balance: The
product manager as the person that will
make a new product to work, needs to
understand and have a strong grasp of the
needs of the customer / market and
therefore make the right decisions on
market introduction, product life cycle and
product cannibalization. To achieve the
above he must balance the needs of the
customers with the companys capabilities.
Also he needs to balance product goals with
company objectives. The way a products
success is measured depends on where the
product is in its life cycle. So the product
manager must understand the strategic
company direction and translate that into
product strategy and product life cycle
position.
3. Consider product management as a
discipline: Managing a product must not be
taken as a part time job or function. It
requires continuous monitoring and review.