Product Life Cycle
(Levitt)

Knowledge Center

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.

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

Forum Forum discussions about the Product Life Cycle. Below you can ask a question about this topic, share your experiences, report a new development, or explain something. Start a new topic about Product Life Cycle Share your knowledge here (or ask a question)   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. ... 29   2 comments The Marketing Strategy to Pursue at Various Stages of the PLC The PLC curve is divided into 4 stages: Introduction, Growth, Maturity and Decline. The suggested logical strategies at each of the stages are: INTRODUCTION ⇨ CREATE THE MARKET SHAR... 12   🔥 NEW The Impact of Short Term Investing / Financing on New Product Development Dear all, I am currently carrying out an investigation on the impact of short term financing and short term capital investment. B2B industrial markets are facing constant pressure for produc... 10   4 comments 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 ... 6   Product Life Cycle (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 interested to learn how the PLC can be used to analyze food stand... 4   3 comments How to Avoid the Decline Stage of the PLC? Understanding the phases of the product life cycle, are there ways of preventing these products from reaching the decline phase?... 4   5 comments

Best Practices The best, top-rated topics about the Product Life Cycle. Here you will find the most valuable ideas and practical suggestions. When is a product successful? When can a product be considered to be successful in the light of the Product Life Cycle Theory?... 32   3 comments The Product Life Cycle is not always Shaped like a Wave Form! 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... 12   11 comments

Expert Tips Advanced insights about the Product Life Cycle. Here you will find professional advices by experts. Why PLC is not Done at the Company Level Innovation Management, Product Management In MIT Sloan Management Review of Fall 2006, Donald Sull and Dominic Houlder of LBS stress that NOT companies, but chanc... Market Leader Strategies in the GROWTH Stage of the Product Life Cycle Growth Stage Strategy, Market Leader Strategy, PLC The appropriate marketing strategies for products or services that are in the growing stage of the PLC depend on the pos... Don't Make this Frequently Made Mistake in Product Life Cycle Management! Innovation Management, Product Marketing, Product Lifecycle Management Watch out for a frequently made mistake that is based on a wrong interpretation of this model: Do not assume aut... Unconventional Product Life Cycle: High Tech Managing the PLC of High-tech Products In his 1991 book 'Crossing the Chasm' Geoffrey A. Moore presented the unconventional PLC of high-tech products. In Moore... Typical Product Characteristics and Changes during PLC Product Management Products may change dramatically during their PLC in terms of quality, design, differentiation degree, destination of us... Marketing Strategies in INTRODUCTION Stage of PLC Introduction of a New Product, Introduction of a New Service, Introduction Stage, Introduction Strategies When a business is launching a totally new product or service it could select the following marketing strategies during ... Framework for Decline Phase of the Product Life Cycle Managing the Decline Phase The decline phase of a product PLC is as important as its introduction in the market stage. When products enter this sta... Challenges of the Product Life Cycle for Marketing and R&D PLC at Functional Level, 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 ... Critics of the Product Life Cycle Concept During the Years Product Life Cycle History In the current fast changing environment the efficacy of the PLC model as a marketing tool has been widely questioned b... Organizational Life Cycle Organizational Development Also organizations evolve through a kind of life cycle, a series of developmental stages similar to those described in L... Challenges of the Product Life Cycle for Manufacturing & Distribution PLC at Functional Level, Manufacturing & Distribution Here are some typical challenges faced by Manufacturing and Distribution functions, on each development stage of a produ... How Can Incumbents Respond to Disruptors? 5 Strategic Options in Reaction to Disruptors In recent years, the challenges to incumbent majors across industries have come mainly from low-cost competitors and fr... Innovation Pitfalls Avoiding Innovation Traps Harvard Professor R. Moss Kanter describes 4 common innovation mistakes and corresponding remedies (HBR Nov 2006): 1. S... How to Find Good Product Ideas? List of 10 Approaches Discovering New-Product Ideas, Creative Approaches In his book “Product Leadership: Creating and Launching Superior New Products”, Robert Cooper suggests following ten way... Marketing Strategies in the DECLINE Stage of the Product Life Cycle Decline Stage Strategy, Market Decline Strategy, PLC When a business has its product or service in the decline stage, the following strategies can be used: 1. Profitable su... Follower Marketing Strategies in the GROWTH Stage of the PLC Growth Stage Strategy, Follower Growth Strategy, PLC A company that is characterized as a FOLLOWER in the market should aim at building a market share by winning over some o... Buyer Types and their Behaviours Depending on PLC Stage Understanding what Buyers Want in a Particular Stage It is important to understand that different kinds of people will buy a product in different development stages. And eve... Designing Complex Products or Systems Through User Involvement Early in the Life Cycle Design Thinking, Disruptive Innovation, Blue Ocean Strategy, Introducing Complex Systems, Co-Creation Today, organizations are increasingly developing and designing new and complex products or systems. In other words, the ... The Time Scale of a PLC Must Match the Product Time Scale of PLC, Product Management Too many times the plot is shown in a general mode - but for real products the plot MUST place numbers on the time axis.... Limitations of Product Life Cycle in FMCG PLC Boundaries In his 1993 article 'A Two-Decade Test of Product Life Cycle Theory', D. Mercer from The Open University, School of Man... Three Critical Capabilities in Developing a Strategic Corporate Disruptive Innovation Competence (Disruptive) Innovation Competence, Strategic Innovation Capability, Corporate Strategy, Innovation Leadership Skarzynski and Rufat-Latre (2011) discovered that the successes of disruptive innovators are driven by 3 critical capabi... Marketing Strategies for Market Leaders in the MATURITY Stage Maturity Stage Strategy, Market Leader Strategy, PLC A company that operates its products in the maturity stage can make use of several strategies. The main objective of the... Product Life Cycles do Not Exist in Reality Decision-making Always remember, in reality, products do not have a predictable life and specific life cycle curves followed by differen... Why Some Technology Revolutions Take Off and Others Don't Adoption of New Technologies Back in 1962, Thomas Kuhn wrote “Structure of Scientific Revolutions”, in which he suggested that the entrenched interes...

Information Sources Various sources of information regarding the Product Life Cycle. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Dominant Designs Product Life Cycle Paper by Johann Peter Murmann and Koen Frenken. The concept of a dominant design has taken on a quasi-paradigmatic statu... The Importance of the Product Life Cycle PLC Trainings, Workshops Adam Kaufman explains the critical importance of understanding the Product Life Cycle PLC of your products in your indus... Product Life Cycle (PLC) versus Bass Diffusion Product Management, Decision Making Presentation about the Product Life Cycle model thereby making a comparison with the Bass Diffusion Model. It includes t... Product Life Cycle Diagram Product Management Download and edit the 12manage PowerPoint model for limited personal, educational and business use. Republishing in int...

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