The characteristics of the product life cycle stages help us to explain the development of sales that can be observed over the lifetime of a product. Apr 17, 2019 the product life cycle is an excellent tool which can be used by business managers, strategists and marketing managers to come up with product strategies. Some products are tied to specific business cycles or have seasonal factors that impact growth. Stage of the product life cycle, business strategy, and. The initial stage of the product life cycle is all about building the demand for the product with the consumer, and establishing the market for the product. Stages include introduction, growth, maturity and decline and are explained in detail here. Product life cycle stages managing the product life cycle. What is the product life cycle stages theory by vernon. The four stages are shown in the table below, although decline can be avoided by reinventing elements of the product. Pdf the product life cycle theory and product line. The product life cycle is the concept that a product goes through several stages in the course of its life. Each stage is different and requires marketing strategies unique to the stage. The product life cycle is an excellent tool which can be used by business managers, strategists and marketing managers to come up with product strategies. The case of mobile phones article pdf available in ieee transactions on engineering management 512.
An explanation of the former model leads to an understanding of its perceived shortcomings, and the reason for the takeup. Modern product life cycles are becoming shorter and shorter as products in mature stages are being renewed by market segmentation and product differentiation. Jun 30, 2012 product life cycle consists of different stages that a product or brand must occupy in its life. Product life cycle of apple iphone ebook super heuristics. The product life cycle has four stages, from its introduction in an office to the products decline and removal from store shelves. A guide to new product development product life cycle. A guide to new product development product life cycle management. The product life cycle can be a useful tool in planning for the life of the product, but it has a number of limitations. The conditions in which a product is sold advertising, saturation changes over time and must be managed as it moves through its succession of stage. We are here to educate on the product life cycle stages and help people understand the strenths and weaknesses of this concept. First and foremost, before proceeding into the product life cycle strategies, lets define what a product life cycle is. Product lifecycle management plm is the succession of strategies by business management as a product goes through its lifecycle. Not all products follow a smooth and predictable growth path. Moreover, it plays a crucial role in various organizational functions, such as corporate strategy, finance, and production.
By explaining the product life cycle stages, we clearly define the phase, each with its own characteristics that will have different impact on. Product life cycle analysis, product portfolio analysis, and positioning analysis will be discussed. Stages of the product life cycle principles of marketing. The above diagram depicts a typical product life cycle. Corresponding to these stages are distinct opportunities and problems with respect to marketing strategy and profit potential. Product life cycle consists of different stages that a product or brand must occupy in its life.
If the project produces a new facility, such as a petrochemical processing. As the product moves through different stages of its life cycle, sales volume and profitability change from stage to stage as shown in fig. The product life cycle can be divided into several stages characterized by the revenue generated by the product or range of products, such as a brand. This entire journey is called the product life cycle. Each stage represents a different set of uncontrollable. The four product life cycle stages alvernia university online. Pdf impact of product life cycle stages on barriers to entry. Product life cycle product life cycle is a normative and descriptive model for the life of products in general the plcs importance to marketing decision makers is to help identify appropriate strategies. Identify the stages of the product life cycle a company has to be good at both developing new products and managing them in the face of changing tastes, technologies, and competition. Every project has beginnings, a middle period during which activities move the project toward completion, and an ending either successful or unsuccessful. Such product strategies look at the various stages the product is in the life cycle and then come up with the appropriate strategies. Understanding the 5 stages of the project life cycle. When used carefully, the plc concept can be a great help in developing goods marketing strategies for the different product life cycle stages.
The project life cycle the project manager and project team have one shared goal. Product life cycle explained 4 stages of product life cycle. Descriptivemodel for the life of products in general individual products will experience their own variation some products may have a higher sales curve appeal to a larger number of segments than normal some products may have a lower sales curve appeal to a smaller segment than normal. In this article, i explain to you the concept of the product life cycle, in detail, with the help of the example of an apple iphone. There is a chance of missing one or more stage in product life cycle i. The product cycle theory then introduces five stages of production. It is an essential tool for analyzing the prospective success or potential of a. Why companies should know their product life cycle.
Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller. Profits rise and fall at different stages of the product life cycle. Every stage poses different opportunities and challenges to the marketer. The product life cycle portrays distinct stages in the sales history of a product. A short product life cycle is one of the hallmarks of a fad. How to use the product lifecycle model smart insights. Contemporary research have moved beyond the oneofakind product life cycle model with isolated phases of introduction, growth, maturity, and decline. The sixphase comprehensive project life cycle model.
Product life cycle theory comprises analysis of a products life in the market from the time it has been launched to its withdrawal from the market. This article dwells on the four stages of a product life cycle the product life cycle theory is used to comprehend and analyze various maturity stages of. Product development, product introduction, product growth, product maturity and finally product decline. The product life cycle plc starts with the product s development and introduction, then moves toward withdrawal or eventual demise. It is a strategy tool that helps companies plan for new product development and refine existing products. The product life cycle can focus a marketer on a defined set of products and competitors in the current marketbut miss broad trends or innovations in adjacent markets and products. By explaining the product life cycle stages, we clearly define the phase, each with its own characteristics that will have different impact on each reader depending on their particular situation. The product life cycle theory and product line management. Managers need to formulate a marketing strategy that generates a. Product life cycle management plm is the succession of strategies by business management as a product goes through its life cycle. The concept of the product life cycle is today at about the stage that the copernican view of the universe was 300 years ago. Introduction stage this stage of the cycle could be the most expensive for a company launching a new. Products enter the market and gradually disappear again.
The life of most products can be divided into five key stages. The product life cycle stages are 4 clearly defined phases, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. According to raymond vernon, products can be categorized into three stages depending on product life and trade behavior in the international trade market. This progression is identified as the product life cycle and is linked with alterations in the marketing condition, consequently affecting the marketing methodology and the marketing mix. Products require different marketing, financial, manufacturing, purchasing, and human resources strategies in each life cycle stages. Pdf this study focuses on the importance of barriers to entry in five industries and examines the impact of industry and product life cycle stages on. While some products may stay in a prolonged maturity state, all products eventually phase out of the market due to. The life story of most successful products is a history of their passing through certain recognizable stages. Such product strategies look at the various stages the product is in the life cycle and then come up with the appropriate strategies i initially recommend you to read the article on product life cycle and strategies. A very simple explanation of the product life cycle theory. In addition, hofer developed descriptive propositions for each stage of the.
It is a useful tool for managers to analyze and develop strategies 5 ps of marketing the 5 ps of marketing product, price, promotion, place, and people are key marketing elements used to position a business strategically. Seven major lifecycle stages are identified and defined. There may of course be product improvements new projects to extend the product life. Benefits and limitations of product life cycle plc.
May 11, 2019 the product life cycle discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market. Examples, strategies, definition, 5 stages, examples, notes and diagram. Product development, product introduction, product growth, product maturity and. Characteristics of the product life cycle stages and. However, using the plc concept for forecasting product performance or developing marketing strategies brings some. For consumer products the product life cycle typically has five phases. The life cycle analysis of a product enables an organization to make efficient pricing policies with respect to each stage of the product. The different stages of plc as shown in figure11 are explained as follows. Product passes through four stages of its life cycle. A marketer should watch on its sales and market situations to identify the stage in which the product is passing through, and. Challenges in the product life cycle principles of. Mar 28, 2018 every product we encounter has a life cycle.
The model is thenappliedto examine the risk of attacks at various stages of the lifecycle. While some products may stay in a prolonged maturity state, all products. There are 4 different product life cycle stages which are known as introduction, growth, maturity and decline. Products generally go through a life cycle with predictable sales and profits. Misunderstanding or a lack of knowledge at any stage can lead to the.
A product, when it is new, advances through an arrangement of stages from incubation to development, maturity, as well as decline. It is important to see the marketing process in the context of the complete product life cycle, from basic research to genericization at the end of the product patent. In other words, the product life cycle describes the stages that a product is likely to experience. Products typically go through four stages during their lifetime. The life cycle can be very short, as pertains to a product that is for an event, such as a christmas toy, or very long such as a watch or a car. Impact of product life cycle stages on barriers to entry article pdf available in journal of strategic marketing 154. The understanding of a products life cycle, can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the products success or failure. Each of stages demands the unique or distinguished set of marketing strategies. Benefits and limitations of product life cycle plc benefits. This article dwells on the four stages of a product life cycle the product life cycle theory is used to comprehend and analyze various maturity stages of products and industries. Sep 24, 2014 the product life cycle stages or international product life cycle, which was developed by the economist raymond vernon in 1966, is still a widely used model in economics and marketing.
Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage. The life cycle has four stages introduction, growth, maturity and decline. The management emphasis on the marketing mix elements. Sep 28, 2018 product life cycle stages plays and important part in the product management. Major changes in business strategy are usually required during three stages of the life cycle. The products life cycle period usually consists of five major steps or phases. A typical product life cycle can be illustrated from discovery to decline as follows william and mccarthy, 1997 figure 21. The product life cycle plc is a biological metaphor that traces the stages of a products acceptance from its introduction birth to its decline death. According to griffin and ebert 2002, a product life cycle is a series of stages through which it passes during its profit producing life. It is an essential tool for analyzing the prospective success or potential of a new product through research and development.
A marketer looking for the next feature to add to a digital camera to extend the maturity phase could easily miss the impact that the smartphone would have on the. Product life cycle and its stages free essay example. Product life cycle and marketing management strategies. The key emphasis will be on promoting the new product, as well as making production more costeffective and developing the right distribution channels to get the product to market. Product life cycle overview, four stages in the product. The product life cycle stages are 4 clearly defined phases, each with its own characteristics that mean different things for business that are trying to manage the. The product life cycle stages can be used for describing how products and markets work. Its imperative for a business to fully understand all four stages of the product life cycle. The product lifecycle plc describes the stages of a product from launch to being discontinued. Product life cycle an overview sciencedirect topics. This article is focusing on a number of the primary product life cycle management techniques that can be used to optimize a products revenues in respect to its effective positioning in a market during the introduction stage of the product life cycle. Companies always attempt to maximize the profit and revenues over the entire life cycle of a product.