Product life-cycle management
) 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 a 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 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
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.
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
Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo...
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.
- Product management
Product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle....
- New product development
In business and engineering, new product development is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible or intangible...
- Software product management
Software product management is the process of managing software that is built and implemented as a product, taking into account life-cycle considerations and generally with a wide audience. It is the discipline and business process which governs a product from its inception to the market or...
- Technology lifecycle
Most new technologies follow a similar technology maturity lifecycle describing the technological maturity of a product. This is not similar to a product life cycle, but applies to an entire technology, or a generation of a technology....
- Product lifecycle management
In industry, product lifecycle management is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal...
- Material selection
Material selection is a step in the process of designing any physical object. In the context of product design, the main goal of material selection is to minimize cost while meeting product performance goals. Systematic selection of the best material for a given application begins with properties...
- Toolkits for user innovation
Toolkits for user innovation allow manufacturers to " abandon their attempts to understand user needs in detail in favor of transferring need-related aspects of product and service development to users along with an appropriate toolkit"...
- Application lifecycle management
Application Lifecycle Management is a continuous process of managing the life of an application through governance, development and maintenance...
Obsolescence is the state of being which occurs when an object, service or practice is no longer wanted even though it may still be in good working order. Obsolescence frequently occurs because a replacement has become available that is superior in one or more aspects. Obsolete refers to something...
- Diminishing manufacturing sources and material shortages (DMSMS)
Diminishing manufacturing sources and material shortages is defined as: "The loss or impending loss of manufacturers of items or suppliers of items or raw materials." DMSMS and obsolescence are terms that are often used interchangeably...
- Planned obsolescence
- Product teardown
A product teardown, or simply teardown, is the act of disassembling a product, such as a television set, to identify its component parts and functions. For products having secret technology, such as the Mikoyan-Gurevich MiG-25, the process may be secret...