Stages of Product Life Cycle
Stages of Product Life Cycle
Stages of Product Life Cycle
Like human beings, products also have their own life-cycle. From birth to death
human beings pass through various stages e.g. birth, growth, maturity, decline and
death. A similar life-cycle is seen in the case of products. The product life cycle
goes through multiple phases, involves many professional disciplines, and requires
many skills, tools and processes. Product life cycle (PLC) has to do with the life of
a product in the market with respect to business/commercial costs and sales
measures. To say that a product has a life cycle is to assert four things:
GROWTH STAGE:
1. Costs reduced due to economies of scale.
2. Sales volume increases significantly.
3. Profitability begins to rise.
4. Public awareness increases.
5. Competition begins to increase with a few new players in establishing
market.
6. Increased competition leads to price decreases.
MATURITY STAGE:
1. Costs are lowered as a result of production volumes increasing and
experience curve effects.
2. Sales volume peaks and market saturation is reached.
3. Increase in competitors entering the market.
4. Prices tend to drop due to the proliferation of competing products.
5. Brand differentiation and feature diversification is emphasized to
maintain or increase market share.
6. Industrial profits go down.
DECLINE:
1. Costs become counter-optimal.
2. Sales volume decline or stabilize.
3. Prices, profitability diminish.
4. Profit becomes more a challenge of production/distribution efficiency
than increased sales.
1. GROWTH-SLUMP-MATURITY-PATTERN:
Sales grow rapidly when the product is first introduced and then
fall to a petrified level that is sustained by late adopters buying
the product for the first time and early adopters replacing it.
2. CYCLE-RECYCLE PATTERN:
3. SCALLOPED PLC
A style can last for generations and can go in and out for vogue.
Fashion:
A currently accepted or popular style in a given field is fashion. It passes
through 4 stages:
1. Distinctiveness
2. Emulation
3. Mass fashion
4. Decline
The length of fashion cycle is hard to predict. Fashion ends because they
represent a purchase compromise, and consumer start looking at the missing
attributes.
If too many consumers adopt the fashion, it results in turning others away.
Length of particular fashion cycle depends on the extent to which the fashion
meets a genuine need.
Fad:
Fashions that come quickly in to public view are adopted with great zeal, peak
early and decline very fast.
Their acceptance cycle is short, and it tends to attract only a limited following
who are searching for excitement or want to distinguish themselves from
others.
We can all identify products that have changed from their original form
and/or content. And, with today's rapid changes in technology, almost every
product will undergo some sort of modification during its lifetime.
This idea is demonstrated by the Product Life Cycle concept, which shows the
path a typical new product takes from its inception to its discontinuation. To
be precise, it describes the stages a product goes through from its
introduction, through its growth until it is mature and then finally its decline.
Moreover, it’s associated with changes in the marketing situation, thus
impacting the marketing strategy & the marketing mix as well. Knowledge of
the product’s life cycle can provide valuable insights into ways the product
can be managed to enhance sales and profitability. Marketing activities are
heavily dependent on the stage in the product life cycle.
Products do not last forever. A typical cycle for a product is as follows:
First a product will be developed. The prototype will be tested & market
research carried out before it is launched onto the market. There will be no
sales at this time.
* In the introduction stage the product is launched in the market. The firm
will create product awareness & develop a market for the product. No profits
are made at this time as development costs have not yet been covered. Iris-
based personal identity cards are in the introduction stage of the product life
cycle. It may take some products a substantial amount of time to catch on in
the market before they enter their growth phases. These products have been
referred to as "high learning products." These products often are complex to
understand or use, may be extremely expensive, may not be easy to sample
before committing to purchase, or may not be compatible with existing social
values. The result is that the product’s rate of acceptance in the market is
slowed. The impact on the marketing mix is as follows:
* In the growth stage sales start to grow rapidly. Profits start to be made as
more and more customers buy the product. But competitors see the
opportunity and enter the market. Some just copy the most successful
product, or try to improve it to compete better. Others try to refine their
offerings to do a better job of appealing to some target markets. The new
entries result in much product variety. The Internet, more specifically the
World Wide Web component of the Internet, is probably in the growth phase
of its life cycle. The advantages of the Internet have resulted in its very rapid
acceptance in consumer and business markets. Furthermore, iPod (portable
digital music player) is also in the growth stage of its life cycle. The impact on
the marketing mix is as follows:
* In the Decline stage, new products replace the old. Price competition from
dying products becomes more vigorous, but firms with strong brands may
make profits until the end because they successfully differentiated their
products. They may also keep some sales by appealing to the most loyal
customers or those who are slow to try new ideas. Costs, because competition
is still intense, continue to rise. Profits, as expected, continue to erode during
this stage with little hope of recovery. Typewriters are in the decline stage of
the product life cycle.
As sales decline, the firm has several options:
a) Maintain the product- possibly rejuvenating it by adding new features &
finding new uses.
b) Harvest the product- reduce costs & continue to offer it, probably to a loyal
niche segment.
c) Discontinue the product- liquidating remaining inventory or selling to
another firm that is willing to continue the product.
When the product reaches the end of maturity stage (i.e. the saturation stage)
of its product life cycle, the firm may stop sales starting to fall by adopting
extension strategies. These are ways that sales may be given a boost. Some
possible ways businesses might extend the life cycle of their product are as
follows:
In conclusion, it is fair to say that the model can only be used to help
identify the symptoms of each stage. Each product will spend
different lengths of time in each stage and there is no physical way
of showing this on the product life cycle model. However, the better
your financial control, the more you will be able to track individual
product.
We use life cycle assessment (LCA) for calculating the environmental impact,
energy usage, and greenhouse gas emissions of our products and processes.
By identifying the largest sources of emissions and energy use over the
lifecycle, we have already been able to take action in minimizing the
environmental impact of our mobile devices.
Environmental impact:
Over the years, we have been able to reduce the environmental impact of our
products significantly. For example, the environmental impact of the Nokia
X2 and similar recently launched devices is just a third of the impact of the
Nokia 3310 which was launched a decade ago.
Today, many manufacturers report the environmental footprint of their
products. At Nokia we use life cycle assessment (LCA) for calculating the
environmental impact of our products and processes. Our calculations include
the entire mobile device life cycle, from raw material acquisition to the end of
the product life. Our life cycle assessment method has been externally audited.
For example, they have been constructed using recycled and environmentally-
friendly materials; include features like Power Save mode, OLED display, an
'Unplug charger' reminder, and an in-device e-guide (allowing us to supply
reduced ‘quick guides’ in sales packages); and use the latest high efficiency
chargers.
Nokia Fast Charger AC-8, Nokia Fast Micro-USB Charger AC-10 and Nokia
Fast Charger
AC-15 let you charge your device with a clear conscience. They use just 0.03W
in no-load mode (the amount the charger uses if you forget to unplug it from
socket when the phone is fully charged). This is 90-95% less than what typical
chargers can waste. AC-8 and AC-15 feature standard Nokia 2 mm charging
plug, AC-10 provides an energy efficient option for micro-USB charging.
Naturally we're also using more recycled and reusable materials in our
packaging and reducing its volume. More than 95% of our packaging is made
of renewable, paper-based materials, of which up to 60 % is recycled content.
Our packaging is 100 % recyclable.
All of the materials in Nokia devices can be used again to make new products
or generate energy, so nothing is wasted.
Energy efficiency
We're making our phones and chargers more energy efficient. But did you
know that if your charger is plugged in and connected to your phone it's still
consuming a small amount of energy, even if your battery is full?
We call this the no-load mode. Typically two thirds of the energy that goes
into a phone during its usage is lost in this way. We've been investigating and
implementing ways to reduce this and overall energy consumption of our
devices.
Over the last decade we've reduced the amount of energy our best in class
chargers use in no-load mode by 95 percent. Our newest chargers go beyond
the energy targets of US Environmental Protection Agency, using up to 90
percent less power in no-load mode than the Energy Star requires, and also
meet the highest European Union standards.
In May 2007 we became the first mobile manufacturer to put alerts into
phones encouraging people to unplug their chargers. Today, the alerts are
rolled out across the product range, and the entire industry has joined
implementing the alerts broadly.
The energy that could be saved globally if all Nokia phone users unplugged
their chargers when their phones are full is equivalent to the amount needed
to power 100,000 average-sized European homes. So pledge to unplug!
Our devices have a power-saving standby mode and a range of energy saving
settings. We've also introduced a new Power Save mode in our 2009 devices,
and plan to implement this to many of our new products to come. You can
manually activate the Power Save mode from the Power menu of the device.
We're also looking at the best way to use new sources of energy such as solar
and fuel cells.