Product Life Cycle - Factors, Techniques, Performances, Pros and Cons

6 Important Factors Affecting Product Life Cycle:

There are many factors affecting life-cycle of a product. The statement of Joel Dean is very important in this regard. He said, “The length of the product life-cycle is governed by the rate of technical change, the rate of market acceptance and the case of competitive entry.”

Some of the important factors affecting life-cycle of a product are discussed here under:

1. Rate of Technical Changes:
   Life-cycle of a product depends upon the rate of technical changes taking place in the country. If technical changes take place in the country at a very high rate, the life-cycle of the products in that country will be very limited because new and improved products take place of the old products.
   On the other hand, if the rate of technical changes in a country is not so high, the life-cycle of the products in that country may be longer. For example, rate of technical changes in India is lower when compared with that of the other developed countries. As a result of it, the life-cycle of products in our country is higher than that of the developed countries.
2. Rate of Market Acceptance:
   The length of life-cycle of products in a country depends upon the rate of market acceptance in the country also. If the customer of a country accepts a new product very fast, the life-cycle of products in such country will be very limited because the customers, who have accepted a product so fast, can accept another product on next day and the product may stand out of the market.
   On the other hand, if the customers of a country accept a product gradually, the life-cycle of products in such country may be quite long. For example, the rate of market acceptance in our country is very low and therefore, the life-cycle of most of the products in our country is quite long.
3. Ease of Competitive Entry:
   The success or failure of a product in the market depends to a large extent upon the situation of competition in the market. If the competitors can enter into a market very easily, the life-cycle of the product will be very short because the competitors can make the products out. On the contrary, if the competitors cannot enter into a market so easily, the life-cycle of products in such market can be fairly long.
4. Risk Bearing Capacity: The enterprises having more risk bearing capacity can keep their products standing in the market for a long period because they can face all the challenges of market effectively. On the other hand, the enterprises having less risk bearing capacity are unable in facing the challenges of the market, life-cycle of their products is curtailed to short.
5. Protection by Patent:
   If the patent of a product is getting registered, the life-cycle of the product can be fairly long, and if the patent of a product is not getting registered, the life-cycle of the product is cut short.

Marketing Techniques Used to Improve Sales in Product Life Cycle:

These strategies extend the life of the product before it goes into decline. Again businesses use marketing techniques to improve sales.An efficient system of store keeping has the following objects:

The techniques are:

1. Advertising:
   It is a good technique to try to gain a new audience or remind the current audience. Tata Nano was revived through heavy advertising. Even Cadbury adopted the new positioning technique by highlighting the fact that it made a good gift and a chocolate is good on happy occasions with a nice catchy phrase “kuch meetha ho jaye”.
2. Price Reduction:
   This technique is always more attractive to customers. Airtel significantly lowered the price to remain in competition.
3. Adding Value:
   The company, under this approach adds new features to the current product, such as video messaging on mobile phones. An I-Phone performing the features of a Laptop. AN LCD being made Pen Drive compatible.
4. Explore New Markets:
   When there is no scope to sell further in the domestic market, it is better for the company to try selling abroad. All the hand set manufactures for mobile phones are exploring the villages and small towns for their cheaper versions of which the stocks are lying with them, but there is no demand in the Metros and the big cities.
5. New Packaging:
   When the old packaging has lost its attractiveness, then brightening up old packaging, or subtle changes such as putting crisps in foil packets be done by the company. All cosmetics companies have repackaged the lipsticks differently for the teenagers and for the older women. Even the vermilion which has been mostly popularised by the TV serials is coming in the stick form and not powder form, so that it does not smudge.

Performance in Different Phases of Product Life Cycle:

Performance in different phases of product life cycle can be studied under four parameters-:

Although several parameters such as strategy, risk, profits etc., Can be considered, but for simplicity sake, only four parameters have been taken.

1. Product:
   This parameter shows that in the first stage of PLC, the quality of product may not be good, but as the product market grows and feed backs are received, there is advancement in product quality, followed by superior quality and standardization in the maturity stage. The decline stage sets in only because the company stops paying heed to market feedback and segmentation.
2. Marketing:
   Under the introduction stage, market penetration is done through heavy advertising and skimming. In the second stage the sales increase and the advertisement costs reduce, in the maturity stage good segmentation is done and by this time there is a slack in aggressive marketing which leads to low sales and declining interest of consumers in the product.
3. Buyer Behavior:
   The buyer behaviour is also worth considering as in the start stages the buyer is reluctant to buy the product and he has to be pushed into buying, soon this changes in the growth stage where the acceptance from buyer comes and soon he reaches the saturation in the maturity stage. In the last decline stage, the buyers are not interested in buying the product.
4. Competition:
   Similarly, when competition is considered, there are few competitors in the introduction stage, then there are huge buyers in the growth stage then there is a shakeout and the company loses some buyers in the maturity stage. Finally at the end stage, which is the decline stage, there may be too less competition or very fierce competition due to which the company might have vanished from the market.

Advantages and Disadvantages of Product Life Cycle:

Advantages of Product Life Cycles:

1. It helps in Understanding Marketing and Development of product. From a marketing and business development perspective, this is one of the strongest advantages of product life cycles
2. For consumers, the product life cycle has generally positive implications by driving innovation, which leads to products that are more effective
3. It helps the marketing division to know the time when innovations are required in the product
4. PLC leads to capture of market in the maturity stage
5. It lets the management know when to discard the product

Limitations of Product Life Cycle:

1. All products follow PLC, But PLC varies a lot, unfortunately, it is applied without any distinction, although is different for different types of products
2. It appears that life comes to an end with decline, but there are examples when after decline the product may have found new popularity and rejuvenation
3. Nothing helps to identify when a product moves from one stage to another. It makes the task of forecasting difficult
4. The model worked well when the environment was relatively stable, not subject to uncertainty as it is today
5. Streetwise marketers point out those unusual circumstances that might interfere with expected life cycle behaviour. It may result in different shape of PLC
6. The life cycle of a product is dependent on sales to consumers. All consumers do not buy in the introductory stage. Some people buy early, others buy after their friends have bought. For any product to be successful it must be bought by early adopters
7. PLC is a metaphor. Products are not organic, and as such do not have to die
8. It attempts to describe only the pattern of evolution
9. There is no scientific basis
10. The pattern may not be the same to all industries
11. All products do not pass through all the stages of PLC