Product life cycle management (marketing)

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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.

Contents
[hide]

• 1 Product life cycle (PLC)

o 1.1 Request for deviation
o 1.2 Market identification
• 2 Lessons of the product life cycle (PLC)
• 3 Limitations
• 4 See also
• 5 References

• 6 External links

[edit] Product life cycle (PLC)

Like human beings, products also have their own life-cycle. 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 four things:

• that products have a limited life,

• product sales pass through distinct stages, each posing different challenges,
opportunities, and problems to the seller,
 • profits rise and fall at different stages of product life cycle, and
• products require different marketing, financial, manufacturing, purchasing,
and human resource strategies in each life cycle stage.

There are six stages in a product's life cycle. here four of them:

Stage Characteristics
1. costs are high
2. slow sales volumes to start
3. little or no competition
1. Market
4. demand has to be created
introduction stage
5. customers have to be prompted to try the product

6. makes no money at this stage

1. costs reduced due to economies of scale
2. sales volume increases significantly
3. profitability begins to rise
4. public awareness increases
2. Growth stage
5. competition begins to increase with a few new players
in establishing market

6. increased competition leads to price decreases

1. costs are lowered as a result of production volumes
increasing and experience curve effects
2. sales volume peaks and market saturation is reached
3. increase in competitors entering the market
4. prices tend to drop due to the proliferation of competing
3. Maturity stage
products
5. brand differentiation and feature diversification is
emphasized to maintain or increase market share

6. Industrial profits go down

1. costs become counter-optimal
2. sales volume decline or stabilize
4. Saturation and 3. prices, profitability diminish
decline stage
4. profit becomes more a challenge of
production/distribution efficiency than increased sales

[edit] 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 or design requirement of a specification, drawing or
other document, for a specific number of units or a specific period of time.

[edit] Market identification

A "micro-market" can be used to describe a Walkman, more portable, as well as

individually and privately recordable; and then Compact Discs ("CDs") brought
increased capacity and CD-R offered individual private recording...and so the
process goes. The below section on the "technology lifecycle" is a most
appropriate concept in this context.[clarification needed][clarification needed]

In short, 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.

[edit] Lessons of the product life cycle (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.

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.

However, the most important aspect of product life-cycles is 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 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.
In the criticism of the product life cycle, Dhalla & Yuspeh state:

...clearly, the PLC is a dependent variable which is determined by market actions;

it is not an independent variable to which companies should adapt their marketing
programs. Marketing management itself can alter the shape and duration of a
brand's life cycle.[1]

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 markets the product or brand life cycle is significantly longer than the
planning cycle of the organisations involved. Thus, it offers little 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.

[edit] Limitations
The PLC model is of 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) experienced 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.