If you are shopping in the mall to buy a new smartphone or are looking at the old music system at home then you are participating and experiencing what is known as the PLC or the product life cycle. When a new product is introduced in the market then it starts its life cycle.
This is where the product starts from being new and of use to the customer and then eventually retiring and going out of circulation from the market. PLC is a continuous process where the product starts from the stage of introduction and then decline and ultimately reaches the retirement stage. In this article, we discuss how a product cycle works, its definition, stages, and some examples of the product life cycle.
In this article let us look at:
So what is the leveling of the product life cycle? PLC is a process that the product goes through from the time it was first launched in the market until it eventually declines and gets removed from circulation. The life cycle of a product goes through four stages. These are an introduction, its growth, maturity, and the decline stage. There could be products that stay in the maturity stage for a long time however all the products would eventually phase out from the market. This could happen because of various factors like saturation, an increase in competition, a drop in sales, or a decrease in demand.
Companies make use of the product life cycle analysis to examine the life cycle of the product. This helps in creating strategies to sustain the longevity of the product or its change to meet the demands of the market and that of the developing technology.
Various pricing models are used by companies when they introduce a new product. This helps in generating sales. The company could go through price skimming where the price of the product is kept high and then lowered as the market demand grows. The company could also apply a price penetration strategy where the initial price is set low to help the product penetrate the market and then increase the price as the demand starts to grow.
The introduction stage is crucial in the life cycle especially in cases when the customers do not take the initial product well. It is also important to focus on packaging and advertising to promote the product. The companies need to evaluate if the product is meeting the needs and the demands of the target market. If the sales go stale then many companies would have to shift their strategy of marketing and would have to market their product in the new demographics to target a new revenue stream.
A PLC analysis lets the company understand when they have to reinvent the product or to pivot the product and take it in a new direction. Companies need to understand where their product is in the product life cycle and then use this information to innovate along with the new technology to diversify their product and to keep up with the present competition and also to elongate the life of the product in the market.
The life cycle of the product starts from the introduction stage and eventually its decline. However, to understand how the cycle will look like, go through the product life cycle examples.
A classic example of the product life cycle is the typewriter. The typewriter was introduced in the 19th century and this is when the technology grew in popularity as it helped to improve the efficiency and ease of writing. However, in the 20th-century typewriters became outdated because of the introduction of laptops and smartphones which caused the demand for typewriters to fall drastically.
Overtaken by computers, typewriters saw the end of sales and thus demand. Now the world is more oriented towards using computers, smartphones, and laptops which in turn is in the maturity phase of the product life cycle.
The above example clearly explains the concept of the product life cycle. This is the length of time when a product gets introduced in the market to the consumers until it gets removed from the stores. The life cycle of a product is broadly divided into four phases and companies need to understand the phase to know what should be done to keep up with the competition.
The product life cycle is characterized by the stages at which it is in. Each product goes through stages where it starts with a huge demand and an increase in sales. The product then matures and eventually is replaced by bigger and advanced products that ultimately lead to the decline in demand for the product that eventually washes off the sales completely.
The types of PLC are primarily of the following kinds.
Now that you know the product life cycle definition, it is important to understand that the product life cycle for companies is important to implement new strategies for advertising or work towards reducing the price. They can also take this opportunity to add in some new features or explore new markets. The best companies are those that have their products at various stages in the product life cycle at any point in time.
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