Strategic Product Management - Relevance of Product Life Cycle (PLC)

1. Strategic
Product
Management
Exploiting the Product Life
Cycle/PGDM/KIAMS/2021 A publication of
Dr. Rajesh K Satpathy

2. Product Life Cycle

3. The term product life cycle
refers to the length of time a
product is introduced to
consumers into the market
until it's removed from the
shelves.
The life cycle of a product is
broken into four stages…
Introduction, Growth, Maturity,
and Decline.
What is a Product Life Cycle?
This concept is used by management
and by marketing professionals as a
factor in deciding when it is
appropriate to increase advertising,
reduce prices, expand to new
markets, or redesign packaging. The
process of strategizing ways to
continuously support and maintain a
product is called Product Life Cycle
Management.

4. What went wrong?

5. What went wrong?

6. What’re the benefits?

7. Exhibit 1:
Product Life
Cycle-
Entire
Industry
(For Example
CFL Lamp)

8. Stage 1. Market Development
This is when a new product is first
brought to market, before there is a
proved demand for it, and often before
it has been fully proved out technically
in all respects. Sales are low and creep
along slowly.
Stage 2. Market Growth
Demand begins to accelerate and the
size of the total market expands rapidly.
It might also be called the “Takeoff
Stage.”
PLC Stages
Stage 3. Market Maturity
Demand levels off and grows, for
the most part.
Stage 4. Market Decline
The product begins to lose
consumer appeal and sales drift
downward.

9. Exhibit 2:
Product Life
Cycle-
Hypothetical
Life Cycle
(For Example
LED Lamp)

10. 1. Promoting more frequent usage of the product among current users.
2. Developing more varied usage of the product among current users.
3. Creating new users for the product by expanding the market.
4. Finding new uses of the basic product.
How ?

11. • When the product life cycle is
predictable, the management
must be cautious in taking
advance steps before the
decline stage, by adopting
product modification, pricing
strategies, style, quality,
change, etc.
• The firm can prepare an
effective product plan by
knowing the product life
cycle of a product.
Significance of Product Life Cycle
• The management can find new uses
of the product for the expansion of
market during growth stage and for
extending the maturity stage.
• The management can adopt latest
technological changes to improve
the product quality, features and
design.

12. The typical life-cycle of a
manufacturing process or production
system from the stages of its initial
conception to its culmination as
either a technique or procedure of
common practice or to its demise.
The Y-axis of the diagram shows the
business gain to the firm of the
technology while the X-axis traces
its lifetime.
Technology Innovation and PLC

13. 1. The research and development (R&D) phase (sometimes called the
"bleeding edge") when incomes from inputs are negative and where
the prospects of failure are high
2. The ascent phase when out-of-pocket costs have been recovered and
the technology begins to gather strength by going beyond some Point
A on the TLC (sometimes called the "leading edge")
3. The maturity phase when gain is high and stable, the region, going
into saturation, marked by M, and
4. The decline (or decay phase), after a Point D, of reducing fortunes and
utility of the technology.
The four phases of the Technology Life-cycle (TLC)

14. The Rogers' Bell Curve
The Diffusion of Innovations Theory.

15. Innovation stage: This stage represents the birth of a new product, material of process
resulting from R&D activities. In R&D laboratories, new ideas are generated depending on
gaining needs and knowledge factors.
Syndication stage: This stage represents the demonstration and commercialization of a new
technology, such as, product, material or process with potential for immediate utilization.
Many innovations are put on hold in R&D laboratories.
Diffusion stage: This represents the market penetration of a new technology through
acceptance of the innovation, by potential users of the technology. But supply and demand
side factors jointly influence the rate of diffusion.
Substitution stage: This last stage represents the decline in the use and eventual extension
of a technology, due to replacement by another technology. Many technical and non-
technical factors influence the rate of substitution. The time taken in the substitution stage
depends on the market dynamics.
The four stages of technology life cycle…

16. According to Harvard Business School Professor Youngme Moon, though
the product life cycle concept has been used successfully over the past 40
years, it has made marketers assume that there is only one trajectory for
successful products.
By viewing the product life cycle in the same way, marketers pursue similar
positioning strategies for products and services during each stage of the
life cycle.
In the process, they miss out on opportunities to differentiate
themselves.
The Con of Using Product Life Cycles to Direct
Strategies

17. Thank You !!