Product Life Cycle
(Levitt)

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Analyzing Industry maturity stages. Explanation of Product Life Cycle of Levitt, Fox, Wasson, Hofer, Anderson & Zeithaml, Hill & Jones. ('65)

The Product Life Cycle model can help to analyze maturity stages of products and industries.

The term was used for the first time by Theodore Levitt in 1965 in an Harvard Business Review article: "Exploit the Product Life Cycle" (Vol 43, November-December 1965, pp 81-94). Any company is constantly seeking ways to grow future cash flows by maximizing revenue from the sale of products and services. Cash Flow allows a company to maintain its viability, invest in new product development and improve its workforce. All this in an effort to acquire additional market share and become a leader in its respective industry.

A constant and sustainable cash flow (revenue) stream from product sales is key to any long-term investment, and the best way to attain a stable revenue stream is to have one or more Cash Cows. Cash Cows are strong products that have achieved a large market share in mature markets.

Also, the modern Product Life Cycle is becoming shorter and shorter. Many products in mature industries are revitalized by product differentiation and market segmentation. Organizations increasingly reassess product life cycle costs and revenues, because the time available to sell a product and recover the investment shrinks.

Although the product life cycle shrinks, the operating life of many products is lengthening. For example, the operating life of some durable goods, such as automobiles and appliances, has increased substantially. As a result, the companies that produce these products must take their market life and service life into account when they are planning. Increasingly, companies are attempting to optimize revenue and profits over the entire life cycle. They do this through the consideration of product warranties, spare parts, and the ability to upgrade existing products.

Product Life Cycle Industry Maturity Stages It is clear that the Product Life Cycle concept has significant impact upon business strategy and corporate performance. The Product Life Cycle method identifies the distinct stages affecting sales of a product. From the product's inception until its retirement.

The stages in the Product Life Cycle

Introduction stage. The product is introduced in the market through a focused and intense marketing effort designed to establish a clear identity and promote maximum awareness. Many trial or impulse purchases will occur at this stage.
Growth stage. Can be recognized by increasing sales and the emergence of competitors. At the vendor's side, the Growth stage is also characterized by sustained marketing activities. Some customers make repeat purchases.
Maturity stage. This phase can be recognized when competitors beginning to leave the market. Also, sales velocity is dramatically reduced, and sales volume reaches a steady level. At this point in time, typically loyal customers purchase the product.
Decline stage. The lingering effects of competition, unfavorable economic conditions, new trends, etc, often explain the decline in sales.

Several variations of the Industry Life Cycle model have been developed to handle the development of the product, market, and/ or industry. Although the models are similar, they differ as to the number and names of the stages. Here is a list of some major models:

variations of the life cycle model

1973: Fox: precommercialization - introduction - growth - maturity - decline.
1974: Wasson: market development - rapid growth - competitive turbulence - saturation/maturity - decline

1984: Anderson & Zeithaml: introduction - growth - maturity - decline

1998: Hill and Jones: embryonic - growth - shakeout - maturity - decline

Product Life Cycle Forum

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Comparing the Product Life Cycle and the BCG Matrix
"We can map or plot the product life cycle stages to the BCG matrix quadrants as follows:
1. Introduction - Question Mark
2. Growth - Star
3. Mature - Cash Cow
4. Decline - Dog
..."

References of PLC Gates Wanted
"What are some useful references about Product Life Cycle (PLC) gates?"

The Effects of Shortening Product Life Cycles
"Due to various reasons, PLC's are getting shorter...
What precisely are the effects of this process? For example to a company that produces high tech gadgets... Thanks..."

Product Life Cycles are Not Fluent
"In reality, product life curves are not so smooth nor bell curve shaped.
There are ditches, then relaunches with an improved product, then steady growth, then decline in hiccups."

The Element of Time in Product Life Cycle
"Has anyone researched the "time characteristics" of various markets with the intention to establish early warnings/triggers of the next product life-cycle stage? This would allow time and reven..."

What is the Influence of a Product Recall on the PLC?
"Nowadays we hear a lot about organisations recalling their products from markets due to various reasons.
How is this product recall mechanism related to the product life cycle?"

Effect of Moment of Introduction on Product Life Cycle?
"Is there a relationship between the introduction time in various parts of the world of a certain product (for example the iPhone which is introduced earlier in the US) and the product life cycle of th..."

Product Life Cycle and Capacity Planning
"How does the PLC curve influence various capacity decisions / strategy, depending on the PLC stage?"

Pricing Strategy as per Product Life Cycle Stage
"Can somebody explain appropriate pricing strategy as per Product Life Cycle Stage? Thanks..."

Pepto Bismol's Long Life
"Pepto Bismol is alive and leader of it's category despite its old age (108 years); the product is basically the same... How do you explain that?"

Calculating Product Life Cycle
"If we had to determine the life cycle of a product how can it be done. What quantitative variables should we take in consideration for calculating the same and why?"

Real Estate Business, Life Cycle
"In the present state, the life cycle of a particular product/project in real estate could have a long flat phase, before it achieves growth as well as maturity.. In such case, the curve shall have hor..."

Revitalization: Why and When?
"Brand Management: why do marketers go for revitalization and in which stage of the Product Life Cycle (PLC)?"

Stage after Breakeven
"What is the name given to the stage where a product hit a breakeven?"

Opportunity for Value Engineering in PD?
"Opportunity for VE in terms of areas during the life span of a product. We all know that as product development goes in to maturity stage, the opportunity for VE is limited but still opportunity is th..."

Avoiding the Decline Stage
"Understanding the phases of the product life cycle, are there ways of preventing these products from reaching the decline phase?"

Revitalization from maturity / decline phase
"The wave form is not carved in stone. Sometimes a product (or service) that is already in its Maturity or even Decline phase can suddenly re-emerge in a growth phase. Often this is the result of a tec..."

Product Life Cycle versus Ansoff Model
"Can the relationship of Ansoff and the Product Life Cycle model be summarised as follows?
- Product Development - Introduction Stage of PLC.
- Market Development - Growth stage of PLC.
..."

When is a product successful?
"When can a product considered to be successful in the light of the Product Life Cycle Theory?"

PLC at company level?
"In MIT Sloan Management Review of Fall 2006, Donald Sull and Dominic Houlder of LBS stress that NOT companies, but chances are going through a life cycle. They recommend that companies manage a portfo..."