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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.
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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
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.
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:
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.