Idea of Product Life Cycle

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Idea of Product Life Cycle, At first, the hypothesis of the ‘Product Life Cycle’ was established in the 1950s which had explained the expected life cycle of some products starting from the very beginning to the final time of a product in a market. The entire life which a product passes through in a market is divided into four phases or stages which are ‘product introduction’, ‘product growth’, ‘maturity’ and ‘decline’.
The Model of ‘Product Life cycle’ is becoming popular for the last some decades. This is an important view and the principle of business which the manufacturer of goods has to understand and adopt in order to get profits and to stay in the field of business. The goal to manage a product life cycle is to increase its power to gain profits at each stage. The model of ‘life cycle’ is basically connected with the conjecture of marketing.

INTRODUCTION

Consumers buy millions of goods every year. All of these articles have limited lives. By the passage of time the older and long life products lose their attraction and become less popular and likewise the demand increases for some modern products as soon as some new model is launched or some modifications are introduced(Gan et al., 2015). The companies producing the goods bitterly understand the different stages of life cycles in different products.

They further know that the goods which they sell have a life span in some limits. The majority of the companies intend to make heavy investments for development of new products to grow and continue their business(Stanford-Smith, 2009). The right way to manufacture successfully is not only to understand the life cycle but it depends upon appropriate management of the product though their entire life by applying the right resources as well as by adopting best marketing and sales strategies, dependent upon the stage of life cycle of the product.
Stages
The ‘life cycle’ of a product has got four clear defined stages; each stage has its own characteristics, which means the different things about business which the companies are trying to get manage for the life cycle of some particular product (Coelho and McLaren, 2012). These stages are as under

1. Introduction stage
In this stage the life cycle of the product may be very expensive for the company introducing some new product(Waghmode, 2014). Sales may be low due to small size of the market and less demand for the newly introduced product, the demand may be increased by passage of time. In a sector of competition of products the cost of newly introducing product may be very high due to research work, development, consumer testing and marketing. During this introduction phase, there should likely heavy advertising and promotional activities designed to raise up the awareness in respect of new product and to check the sale among early purchasers who are the adventurous consumers liking to own some cutting edge product(Clayton and Heo, 2011).

The market penetration must be, depending upon the nature of goods, should either get a premium price so the developing cost can be recovered rapidly or be priced at a low level to have wide spread adoption. During this stage the number of products sold is little because the business has yet to expand awareness of the product among the potential consumers. At this stage the advertisement is very crucial so the budget incurred in marketing is often substantial. The process and style of advertisement depends upon the nature of the product. If it is intended that the product should go to mass audience, the campaign of advertisement may be built in order and around one theme. If the resources of the company are limited or the product is specialized, then a smaller campaign should be used which could used to target a very specific audience.

As the product moves towards maturity, the budget incurred on advertisement automatically shrinks because the audiences are already consumer of the product and are well aware about it. Various techniques are adopted to exploit the early stage use of penetrating prices i.e. low prices for speedy establishments in addition to gliding. Initially lofty prices are kept, which are later lowered, so that the initial purchasers may be attracted in.
2. Growth Stage
In this stage typical strong growth in profits and sale is expected as the company may obtain the benefits of increased economies at a great scale in production, in profit margin and on the overall benefit and profits(Revilla and Fernandez, 2013). It creates a possibility for businesses for investing more money to promote activities for maximizing the potential of the stage of growth.

In this growth phase the professional activities may extend to get focus on expansion of the market for the new segment of the product, either demographic or geographic and giving support to expand the product family. After survival in the introduction stage, a product enters in the growth stage and get start to be observed in markets. At this moment the company may choose as to whether it will go to increase profitability or to increase the market share. This time is the golden period or boom time of a product. Production is increased which results in low unit cost, momentum of sale is build strong, the advertising campaign targets the mass audience instead of any specialized market. Awareness of consumers grows high among the consumers due to competition of the product in the market.

Developments and amendments have to be made as per feedback which has been received and fresh market is to be discovered. The aim of the producer becomes to sustain there in the market during the stage of growth, as long as possible. This will quite possible that the articlemay never sustain at the current phase and gets an immediate slip towards the reduction so much so forthwith disappearance. This may be challenge for entire marketing department of a company for evaluation the entire cost which the company has to bear and the chances of the product for survival and retention in the competition. In this behalf hard choices are needed to be taken thus a trailing product may be unfortunate.
3. Maturity Stage
In this stage the product becomes established, share of owner is built up in the market and aim and goal of the manufacturer is achieved. At this stage a wise strategy is required for investment and marketing as this is the most probable time of competition(Nickell, 2009). At this stage the manufacturer have to introduce the improvement and modifications in the process of production which may give them theadvantages in competition in the market. In that time when a product reaches in the maturity phase, the producing company becomes entitle to get considerable reward for it capital and time indulged in development of the product. The features of the product to be continuously refreshed and there should be some advancement to differentiate the product from the competitive goods and for increase in share in the market. However by the passage of time the expenditure and marketing activity becomes at much lower level than the earlier in life cycle. This maturity stage is the more profit earning time for a product. In this stage the sales are continuously increased(Krishnamoorthi, 2012). Due to very strong awareness the expenditure of advertisement is reduced. Competition is resulted into decreased market share and price. At this stage the competing products are very similar which create difficulties of differentiating the product. The company has to make efforts to encourage the customers of the competitor and to convert them towards its own product. The company should further make efforts to convert the non users into energetic consumers. The main factor is to give more incentive to a retailer to provide the product an enhanced space at more visible place comparing to the other products in competitionwith these products. During the maturity stage the main goal for a company is to retain the product in market for longer period and to extend the product life cycle.
4. Decline Stage
At a stage, the market of the product starts to shrink and this stage is called the decline stage. This process of shrinking may start either due to saturation of market as the entire consumers have purchased the product or some different tor modified product has become in field to replace this product(Millson, 2012). This decline could be inevitable as yet it would be possible to retain the product in field if the companies to produce some items with less expenses by adopting some cheap methods of production and to discover some cheaper markets. When the product starts to decline, the marketing support is completely withdrawn. The sales are becoming at very low level and only as a residual reputation among a small sector of market. Some elder people may like to purchase the old brands which they had started to use at the early introductory period of the product, which might be forty or fifty years prior. The company has to take much important decisions before complete withdrawal of the product from the market; this may be resulting as to leave the declined product in the market, especially if it had served the producer good in its time and there exist some sentimental attachment with it. However it is necessary to not allow the product to cause financial loss to the producer and this usually happens where cost of production increase due to reduction in volume of production, as the demand is moving to the decline(Kakumanu, 1998). The most important factor is this that the existence of the old product would consume the energy and time of the manager and can also cause delay or discourage in development of a new more potential and more profitable replacement product. In the decline stage usually a company has three options to adopt.
1. Bykeeping the product in market with a hope that the competitor will exit from the market. By reducing the costs and by discovering new markets/consumers.
2. By reducing marketing supports and costing till the product is on profit and
3. If the product gives no more profit, it should be discontinued.

Product Life Cycle Management

For the administration of the ‘life cycle’ of a manufactured good, the concerned organizations or the companies have to consider on the following key points of the business (Salisbury, 2008).
1. Development
In the beginning of life cycle of a product its development is necessary. The most important phase of the process of manufacturing, for which the companies have to spend money and time, is the research and new product development, in order to get surety for the success of the product(Valle, Fernandez and Avella, 2003).
2. Financing
The manufacturers are usually needed funds at high level for launching a new product in the market and to sustain it throughout the stage of introduction and more investing capital in maturity and growth phase may be given finance from the profit of the sold product(Wherry and Buehlmann, 2014). During decline phase some more capital may be required for changing the procedure of manufacturing and to discover other areas for marketing. Thus through this entire cycle of the life of any produced item, the company needs the adoption of the actual and suitable procedure of financing its capital for maximizing its potential of profit.
3. Marketing
Keeping in view the stage of life cycle of any product the manufacturing company needs to adapt its promotional and marketing activities(Nguyen, Vignat and Brissaud, 2011). Due to maturity and developments in the market the attitude of the consumer may change. Therefore the promotional and marketing activities for launching a new product in initial and in introduction stage need an entirely different campaign which would be designed to protect the shares in market during maturity stage.
4. Manufacturing
The manufacturing cost of a product is variable during the life cycle. In the beginning due to new process, establishment of machinery and equipments and due a low sale volume, the cost of a product is high(Mekid, 2014). As soon as the market develops, demand and production is increased, the cost start to decrease and when other efficient and cheap method is found and adopted, the cost will further fall. The focus on the market for making more profits and sales companies further have to consider the processes for reducing the costs of manufacturing process.
5. Information
To check the data regarding potential in market which would make a new product valuable in market, the feedback is necessary about various marketing campaigns to check that which one is more effective. In regard to monitor the growth and possible decline of market and to decide the appropriate action, information is a necessary factor for the success of some product. The manufacturers who have developed the most effective information net work can manage efficiently their product along with the product life cycle curve(Chanaron, 2007). Mostly all the manufacturers know and accept the fact that their product has limited lifetime. Thus they can do the appropriate acts regularly according to the demands of all of the phases of ‘life cycle’ of the manufactured product. The product life cycle management is to make sure that the product would be successful during all stages of its life cycle.
New product development
Before embarking a new product on its journey by all four stages of product life cycle it must be developed. Actually the new product development is a bigger part of the process of manufacturing. Mostly all companies realize that the products have some limited life span and hence any new product needs the development to replace it and to keep the manufacturer in business(Cao, Zhao and Nagahira, 2011). Like as the life cycle of a product has various different stages, the new product development also needs to be broken down into various numbers of phases. The development of a new product may involve stages which may basically comprise the key areas as follow.

The Idea:
Each product will have to start on the basis of an idea. It may be basically simple in some cases as the new product is based on the similar article already in existence. In some more cases, it would be something new, unique and revolutionary and may mean the involvement of the idea at generating part of the process of production and further in the field of marketing. In fact a number of leading manufacturers are having full departments which are focused solely for the task searching about the possibility of ‘next big things’. (Pollnac, Seara and Colburn, 2014)
Idea validation begins when any company starts study the market and searches the areas where the need is not met with the product which the company intends to launch, and further tries to think about such a new product which could be able to meet the needs(Ladrón-de-Guevara and Putsis, 2014). The marketing department of any company is responsible to identify the opportunities of the market and to define the masses that would purchase the product. The marketing department has also seen the primary benefit of the product and the use of such product.
Research
To bring a new product in market any company may have many ideas, but as it select the best idea among them, and then the next step is the start to search the market. This will enable the companyto confirm thatwhat would be the demand of the product at the present time and what will a future needof development in order to meet the requirements of potential of market. Conceptual designis born when any idea is approved and starts to get a shape. The company should make studies though the available skill of technology, available materials, on manufacturing capabilities and are determined to create new product(Grimpe, 2007). As soon as it is done, more clear specification is developed,it includes style and price. The marketing department stands responsible for competition review, maximum and minimum estimates of sales and estimates about market share.
Modification
At any time in the market if it is noted that the product requires any modification to enhance the efficiency of the product, the same may be adopted to modify the product by various changes in design and in manufacturing stages in order to bring a finished product which the consumer will want to buy(Creusen, 2011).
Testing
Prior to launching of a product the manufacturers spend a great amount as investment on the production and on its promotion(Vladimirova, 2014). Most companies test the new products with a smaller group of consumers. This testing is helpful to get as surety that the product will be proved as profitable and to not the necessary changing or amendment if required before launching the product in market, and further to decide that how to go to launch the product in the market. With the help of the information collected from the actual consumers, the company will be able to make many strategically the decisions which would be crucial for the success of the product including the selling price and the procedure to be adopted regarding marketing of the same.
Testing and prototype is started when the first copy or the first edition of any good is produced by the consumers and engineers(Zufryden, 2007). The pilot production should be made to ensure that the earlier decisions of engineering department were correct which have established quality control. At this point the marketing department has great importance, which is directly responsible for development about packing of the product, conducting tests through consumers by focusing groups or by some other feedback methods and adopting the tracking the consumer’s response to the product.
Introduction of product:
When a new product makes it’s all the ways through the new product development stage the thing left for doing is the introduction of the product in market and when it is done, good management of product life cycle would ensure that the manufacturer has made the most of his efforts and investment in a right way(Rindova and Petkova, 2007). Thousands new products come for sale in every year and a manufacturer invests a large capital, time and efforts to make it sure that the new product which has been launched will get a success, Introducing a new profitable product in the market is not only to get each stage of new product development rightly but it is also about to manage the product from the time of its launching and then throughout its entire lifespan. The product life cycle management process consists upon a waste range of different production and marketing strategies which all are geared to achieve surety regarding the product life cycle curve to be as long as possible. Sometimes a development phase is also included before launching the product, but mainly the application of an idea of product life cycle is to guide the right nature of market for launching the product. During early stage of lifecycle of a product, the cost incurred for promoting the product is larger comparing to the revenue collected by it(Marion and Meyer, 2011). However effective marketing of a successful product will make it profitable during the Maturity and Growth phases.
Control Uponthe Duration of Lifecycle Stages
The time period of every life cycle stage may be enhanced for some limited time. It would be a fact that the Maturity Phase is the most important time span in the lifecycle of a product(Eling, Langerak and Griffin, 2013). This period has got much importance because it is a period when the product may be at the peak of business and for earning profit.
Following are the typical tactics duly designed for extending the Maturity Phase (Klöpffer, 2003)
1. To increase the quantity of production of the product that may be in the use of existing consumers.
2. Updating or adding the features of the product.
3. To issue advertisements, demonstration and trial of productamong the people who are not using such category of the product at all.
4. Price promotions for attraction of consumers who are using a rival brand
Limitations of the Model
The Product lifecycle Model is a model which describes that how a product may go through all four Phases i.e. Introduction, growth, Maturity and decline after the product is launched (O’Shea, 2002). According to definitions by this model each phase requires a different process of marketing activity to enhance the profitability and life span of a product. Generally it involves an early investmentfor help in securing revenue and profit later on. The drawback that the ‘product life cycle’ ideology has is: it cannot in any way, predict the total span of any stage and also cannot disclose or forecast accurate future sale (Sumei, 2011)
The model of Product Lifecycle can be self fulfilling, as if any marketer comes to the conclusion that every good is near to ‘Decline Phase’ and stops its dynamic promotion, the products sale will automatically decline. This might not happen if it has been timely managed during the time span of its Maturity Phase. Furthermore, it is quite possible that improvement in a product aggressively on some ongoing base, growth may continue for a long period. In markets, successful producers launch new and better products rapidly one after one in short periods. Successful marketers always need to get a wide range of analysis and data to be helpful for them to decide that which product is passing through…