What does the life cycle of a product mean?

Product life cycle is a theory related to a product of the company first introduced in the 1950s. This theory was formulated to explain the expected life cycle of a typical product. It covers the entire lifecycle from the start to its ending, a period divided into the 4 phases of product. It includes introduction, product growth, maturity, and decline.

The main motive of this theory is to optimize the value at each stage of a product. It is a marketing theory. This process involves managing the whole lifecycle of a product, from its introduction, design, manufacture, service and disposal to its obsolescence. Product is an important part of a business and so, this is an important theory.

Advantages of the Product Life Cycle Theory

  • Identifies the sale opportunity
  • Enhances the businesses opportunity and grabs them.
  • Helps to increase the sales
  • Manages the fluctuations which occur seasonally.
  • It improves the prediction.
  • Reduced time to market
  • Improved product quality and reliability
  • Maximise supply chain collaboration
  • Leads to optimization of a product.
  • It is more accurate
  • Generates the data fast and correctly
  • Leads to reduction in wastes.
  • It helps to increase the saving via integration of activities

Every product has a life. We as consumers desire for millions of products every year. A business comes in existence to provide service by selling goods. The product life cycle has 4 very clearly defined stages.So, the business units should know properly about their product and its life cycle. Each stage has its own characteristics. The characteristics mean different things for business and therefore they constantly try to manage the life cycle of their particular products.

Below are the stages that a product generally undergoes through.

Product Life Cycle Stages

Introduction Stage – This is a stage wherein the product is introduced in the market. This stage is preceded by ample research and study of the market. In this stage the product might not sell out at its best so, it may incur losses. This is a risk-taking stage. Promotion and advertising plays an important role.

Growth Stage – In this stage, the company grows. The sales increases and the company begins to benefit from the profit margins and the overall amount of profit, will increase. Thus, investment increases and the product is given a boost in this stage.

Maturity Stage –The product is well established during the maturity stage. Now, the aim for the manufacturer is to maintain the market share. This stage is characterized by competition and wise investment strategies. Innovation and modification is needed here.

Decline Stage – It so happens that the product in the market, its demand begin to shrink. This is called as the decline stage. This generally happens because the product has reached the level of saturation and the customers are or may have stopped buying the product. This happens usually when people get bored of the same product, or a better product comes in the market with less price and better technology. This is the final stage for a product.

Product Life Cycle Examples

The example mentioned below will give a clear insight about the topic.
1. Introduction – 3D TVs
2. Growth – Blueray discs/DVR
3. Maturity – DVD
4. Decline – Cassettes

Limitations to the theory of the product life cycle

There are some limitations to the theory, although this theory is widely accepted and benefited from.
  • There is no particular amount which determines the stay of a product at a stage. There may be variations. Moreover, the lengths of all the stages are not same and this is often overlooked.
  • The theory does not talk about product redesign.
  • There is nothing said about reinvention of a product.
  • There is no evidence which says that all products must die. Some products can mature again from decline stage. There are exceptions always/
  • This theory over-emphasizes new products ignoring mature products. There are possibilities when matured products can derive greater profits than the new ones.
  • More emphasis is given to individual products. The companies should focus on larger brands too.

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