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)

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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 StagesIt 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 Help
  PLC and Food Standards
Dear all,
I am looking for information about the potential relationship between the PLC and food standards. In particularly, I am interesting how can the PLC can be used to analyze food standards; and can the phases defined in the original PLC b...
     
 
  Importance of the Product Life Cycle for the CEO
Generally the product life cycle is co-determined by a CEO of the organization where he starts. The idea then culminates into a product, grows up and attains maturity and gradually declines by which time CEO also gets obselete in his function.
T...
     
 
  Why Could a Product in its Decline Stage Still Be Attractive for a Firm?
The logical thinking seems to be that a company should not stay or invest in a 'decline stage product'. However already in 1983, Harrigan and Porter identified three groups of factors that could indicate that a market may still be attractive durin...
     
 
  Configuration Management Summary
CM is a process for managing complex (mostly technical) systems by establishing and maintaining consistency of a product’s performance and functional and physical attributes with its requirements, design and operational information throughout its lif...
     
 
  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
Reactions are welcome......
     
 
  References of PLC Gates Wanted
What are some useful references about Product Life Cycle (PLC) gates?...
     
 
  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 revenue trends to guide management decisions....
     
 
  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 the iPhone?
Is Apple trying to extend the life ...
     
 
  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?...
     
 
  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 horizontal line of longer duratio in stages....
     
 
  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 there. Can we discuss those areas in brief.......
     
 
  Avoiding the Decline Stage
Understanding the phases of the product life cycle, are there ways of preventing these products from reaching the decline phase?...
     
 
  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.
- Market Penetration - Maturity of PLC.
- Div...
     
 

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Best Practices - Product Life Cycle Premium
  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 technology breakthrough or of a crisis.
Example:...
     
 

Expert Tips - Product Life Cycle Premium
 

Market Leader Strategies in the Growth Stage of the Product Life Cycle

The appropriate marketing strategies for products or services that are in the growing stage of the PLC depend on the position of the firm at hand: is ...
Usage (application): Growth Stage Strategy, Market Leader Strategy, PLC
 
 
 

Don't Make this Frequently Made Mistake in Product Life Cycle Management!

Watch out for a frequently made mistake that is based on a wrong interpretation of this model:
Do not assume automatically that a product ...
Usage (application): Innovation Management, Product Marketing, Product Lifecycle Management
 
 
 

Unconventional Product Life Cycle: High Tech

In his 1991 book 'Crossing the Chasm' Geoffrey A. Moore presented the unconventional PLC of high-tech products. In Moore's thinking, the majority of n...
Usage (application): Managing the PLC of High-tech Products
 
 
 

Typical Product Characteristics and Changes during PLC

Products may change dramatically during their PLC in terms of quality, design, differentiation degree, destination of use. Here are some typical aspec...
Usage (application): Product Management
 
 
 

Framework for Decline Phase of the Product Life Cycle

The decline phase of a product PLC is as important as its introduction in the market stage. When products enter this stage, they must be managed to Usage (application): Managing the Decline Phase
 
 
 

Critics of the Product Life Cycle Concept During the Years

In the current fast changing environment the efficacy of the PLC model as a marketing tool has been widely questioned by various writers in the acade...
Usage (application): Product Life Cycle History
 
 
 

Marketing Strategies in Introduction Stage of PLC

When a business is launching a totally new product or service it could select the following marketing strategies during the introduction stage:...
Usage (application): Introduction of a New Product, Introduction of a New Service, Introduction Stage, Introduction Strategies
 
 
 

How to Find Good Product Ideas? List of 10 Approaches

In his book “Product Leadership: Creating and Launching Superior New Products”, Robert Cooper suggests following ten ways to great new-product ...
Usage (application): Discovering New-Product Ideas, Creative Approaches
 
 
 

Innovation Pitfalls

Harvard Professor R. Moss Kanter describes 4 common innovation mistakes and corresponding remedies (HBR Nov 2006):
1. STRATEGY MISTAKES - Seeking...
Usage (application): Avoiding Innovation Traps
 
 
 

Organizational Life Cycle

Also organizations evolve through a kind of life cycle, a series of developmental stages similar to those described in Levitt’s Product Life Cycle. Th...
Usage (application): Organizational Development
 
 
 

How Can Incumbents Respond to Disruptors?

In recent years, the challenges to incumbent majors across industries have come mainly from low-cost competitors and from dotcoms (e.g. British Airwa...
Usage (application): 5 Strategic Options in Reaction to Disruptors
 
 
 

Challenges of the Product Life Cycle for Manufacturing & Distribution

Here are some typical challenges faced by Manufacturing and Distribution functions, on each development stage of a product life cycle:
1. Manu...
Usage (application): PLC at Functional Level, Manufacturing & Distribution
 
 
 

Challenges of the Product Life Cycle for Marketing and R&D

Here following there are some elements which can be useful as a description of the most common challenges faced by both Marketing and R&D functions on...
Usage (application): PLC at Functional Level, Marketing and R&D
 
 
 

Marketing Strategies in the Decline Stage of the Product Life Cycle

When a business has its product or service in the decline stage, the following strategies can be used:
1....
Usage (application): Decline Stage Strategy, Market Decline Strategy, PLC
 
 
 

Designing Complex Products or Systems Through User Involvement Early in the Life Cycle

Today, organizations are increasingly developing and designing new and complex products or systems. In other words, the complexity of the design proce...
Usage (application): Design Thinking, Disruptive Innovation, Blue Ocean Strategy, Introducing Complex Systems, Co-Creation
 
 
 

Marketing Strategies for Market Leaders in the Maturity Stage

A company that operates its products in the maturity stage can make use of several strategies. The main objective of these strategies for a market lea...
Usage (application): Maturity Stage Strategy, Market Leader Strategy, PLC
 
 
 

Buyer Types and their Behaviours Depending on PLC Stage

It is important to understand that different kinds of people will buy a product in different development stages. And even the same people can adopt di...
Usage (application): Understanding what Buyers Want in a Particular Stage
 
 
 

Follower Marketing Strategies in the Growth Stage of the PLC

A company that is characterized as a FOLLOWER in the market should aim at building a market share by winning over some of the competitor's customers a...
Usage (application): Growth Stage Strategy, Follower Growth Strategy, PLC
 
 
 

Limitations of Product Life Cycle in FMCG

In his 1993 article 'A Two-Decade Test of Product Life Cycle Theory', D. Mercer from The Open University, School of Management in UK, draws some rele...
Usage (application): PLC Boundaries
 
 
 

Three Critical Capabilities in Developing a Strategic Corporate Disruptive Innovation Competence

Skarzynski and Rufat-Latre (2011) discovered that the successes of disruptive innovators are driven by 3 critical capabilities, which are important le...
Usage (application): (Disruptive) Innovation Competence, Strategic Innovation Capability, Corporate Strategy, Innovation Leadership
 
 
 

Why Some Technology Revolutions Take Off and Others Don't

Back in 1962, Thomas Kuhn wrote “Structure of Scientific Revolutions”, in which he suggested that the entrenched interests in an old paradigm will res...
Usage (application): Adoption of New Technologies
 
 
 

Product Life Cycles do Not Exist in Reality

Always remember, in reality, products do not have a predictable life and specific life cycle curves followed by different products may vary substantia...
Usage (application): Decision-making
 
 

Resources - Product Life Cycle Premium

Dominant Designs

Paper by Johann Peter Murmann and Koen Frenken. The concept of a dominant design has taken on a quasi-paradigmatic status in analyses of the link betw...
Usage (application): Product Life Cycle
 

The Importance of the Product Life Cycle for the CEO

Adam Kaufman explains the critical importance of understanding the Product Life Cycle PLC of your Industry for any CEO.
Why is the PLC so critica...
Usage (application): PLC Trainings, Workshops
 

Product Life Cycle (PLC) versus Bass Diffusion

Presentation about the Product Life Cycle model thereby making a comparison with the Bass Diffusion Model. It includes the following sections:
1....
Usage (application): Product Management, Decision Making
 

Product Life Cycle Diagram

Download and edit the 12manage PowerPoint model for limited personal, educational and business use. Republishing in intranets, websites, books, magaz...
Usage (application): Product Management
 
 

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Compare with Product Life Cycle: Bass Diffusion Model  |  Stage-Gate  |  ADL Matrix  |  BCG Matrix  |  Relative Value of Growth  |  Positioning  |  GE Matrix  |  Innovation Adoption Curve  |  STRATPORT  |  Profit Pools  |  Marketing Mix  |  Four Trajectories of Industry Change  |  Co-Creation  |  Disruptive Innovation


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