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
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  Product Life Cycles are Not Fluent
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  The Element of Time in Product Life Cycle
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  Effect of Moment of Introduction on Product Life Cycle?
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Best Practices - Product Life Cycle Premium
  The Product Life Cycle is not always Shaped like a Wave Form!
The wave form is not carved in stone. Sometimes a ...
     
 

Expert Tips - Product Life Cycle Premium
 

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

The appropriate marketing strategies for products ...
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 ba...
Usage (application): Innovation Management, Product Marketing, Product Lifecycle Management
 
 
 

Unconventional Product Life Cycle: High Tech

In his 1991 book 'Crossing the Chasm' Geoffrey A. ...
Usage (application): Managing the PLC of High-tech Products
 
 
 

Typical Product Characteristics and Changes during PLC

Products may change dramatically during their PLC ...
Usage (application): Product Management
 
 
 

Framework for Decline Phase of the Product Life Cycle

The decline phase of a product PLC is as important...
Usage (application): Managing the Decline Phase
 
 
 

Marketing Strategies in Introduction Stage of PLC

When a business is launching a totally new product...
Usage (application): Introduction of a New Product, Introduction of a New Service, Introduction Stage, Introduction Strategies
 
 
 

Critics of the Product Life Cycle Concept During the Years

In the current fast changing environment the effic...
Usage (application): Product Life Cycle History
 
 
 

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

Here following there are some elements which can b...
Usage (application): PLC at Functional Level, Marketing and R&D
 
 
 

How to Find Good Product Ideas? List of 10 Approaches

In his book “Product Leadership: Creating and L...
Usage (application): Discovering New-Product Ideas, Creative Approaches
 
 
 

Innovation Pitfalls

Harvard Professor R. Moss Kanter describes 4 commo...
Usage (application): Avoiding Innovation Traps
 
 
 

Organizational Life Cycle

Also organizations evolve through a kind of life c...
Usage (application): Organizational Development
 
 
 

How Can Incumbents Respond to Disruptors?

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Challenges of the Product Life Cycle for Manufacturing & Distribution

Here are some typical challenges faced by Manufact...
Usage (application): PLC at Functional Level, Manufacturing & Distribution
 
 
 

Marketing Strategies in the Decline Stage of the Product Life Cycle

When a business has its product or service in the ...
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 a...
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 maturi...
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...
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 t...
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 ...
Usage (application): PLC Boundaries
 
 
 

Three Critical Capabilities in Developing a Strategic Corporate Disruptive Innovation Competence

Skarzynski and Rufat-Latre (2011) discovered that ...
Usage (application): (Disruptive) Innovation Competence, Strategic Innovation Capability, Corporate Strategy, Innovation Leadership
 
 
 

Why Some Technology Revolutions Take Off and Others Don't

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Usage (application): Adoption of New Technologies
 
 
 

Product Life Cycles do Not Exist in Reality

Always remember, in reality, products do not have ...
Usage (application): Decision-making
 
 

Resources - Product Life Cycle Premium

Dominant Designs

Paper by Johann Peter Murmann and Koen Frenken. Th...
Usage (application): Product Life Cycle
 

The Importance of the Product Life Cycle for the CEO

Adam Kaufman explains the critical importance of u...
Usage (application): PLC Trainings, Workshops
 

Product Life Cycle (PLC) versus Bass Diffusion

Presentation about the Product Life Cycle model th...
Usage (application): Product Management, Decision Making
 

Product Life Cycle Diagram

Download and edit the 12manage PowerPoint model fo...
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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