INTRODUCTION
Every product has its life. Industrial goods may have a longer life than consumer goods. Whenever a product idea is commercialised, the merchandise enters in to the market and competes with the competitors, for making sales and gaining earnings. Products, like human beings, have amount of life. It has been described as life-cycle in human beings and when put on products, it is product market life-cycle, since it relates to particular market. For instance, an old product in the market of Mumbai, may have a new life in a remote village. The product life-cycle may be short for some products and long for various other products. The period varies from product to product. Every product moves through certain stages, collectively known as product life-cycle phases. These levels include:
Introduction
Growth
Maturity
Decline
SIGNIFICANCE OF PRODUCT LIFE-CYCLE
The concept of product life-cycle highlights that sooner or later all products pass away and that if management desires to preserve its earnings, it must replace the declining products with the new ones. The product life-cycle concept reveals in regards to what can be expected searching for a new product at various periods. i. e. , advantages, progress, maturity and drop. Thus, the concept of product life-cycle can be utilized as a forecasting tool. It can warn management that its product will inevitably face saturation and drop, and the variety of problems these stages pose. The product life-cycle is also a useful framework for describing the typical evolution of online marketing strategy over the phases of product life-cycle. This will help in taking reasonable marketing decisions at different stages of the merchandise life-cycle.
After a product has been developed, it is launched in the market with the aid of various promotional devices such as advertising, sales promotion, promotion and paresonal advertising. Quite simply, product development must be followed by the successful advantages of the merchandise in the market. For this, planning introduction of the merchandise starts during the process of product development itself. Every company makes sales projections during benefits, development and maturity level of the product life-cycle. To acheive the projected sales focus on, it formulates promotional, costing and distribution guidelines. Thus, the concept of product life-cycle facilitates integrated marketing policies associated with product, price, place and campaign/distribution.
The features of PLC to a firm are the following:
When the product life-cycle is predictable, the management must be mindful in taking move forward steps before the decline level, by implementing product modification, costs strategies, style, quality, change, etc.
The company can prepare an effective product plan by knowing the merchandise life-cycle of something.
The management can find new uses of the product for the development of market during progress stage and for stretching the maturity level.
The management can adopt latest technical changes to improve the product quality, features and design.
STAGES IN PRODUCT LIFE-CYCLE
A new product moves through set of stages known as product life cycle. Product life pattern pertains to both brand and group of products. Its time frame change from product to product. Modern product life cycles are becoming shorter and shorter as products in mature levels are being renewed by market segmentation and product differentiation.
Companies always attempt to maximize the earnings and revenues over the whole life pattern of a product. In order to achieving the desired level of revenue, the advantages of the new product at the proper time is vital. If new product is attractive to consumer and no stiff competition exists, company can charge high prices and earn high revenue.
Stages of Product Life Cycle
Product life cycle comprises four levels:
Growth stage
product-life-cycle-stages-plc
Fig 1: product life-cycle
Product Life Pattern (PLC)
Introduction stage
Product is introduced on the market with intent to build a clear personality and heavy campaign is done for maximum awareness. Before genuine offering of the merchandise to customers, product moves through product development, will involve prototype and market lab tests. Companies incur more costs in this period and also tolerate additional cost for distribution. On the other hand, there are many customers at this time, means low sales size. So, during introductory level company's earnings shows a negative body because of huge cost but low sales amount.
At introduction stage, the company core target is on establishing market and arising demand for the merchandise. So, the impact on marketing mixture is really as follows:
Product
Branding, Quality level and intellectual property and protections are obtained to activate consumers for the complete product category. Product is under more thought, as first impression is the last impression.
Price
High(skim) pricing is used to make high revenue with intention to cover primary cost in a brief period and low charges is used to penetrate and gain the marketplace share. company choice of pricing strategy is determined by their goals.
Place
Distribution at this stage is usually selective and dispersed.
Promotion
At introductory stage, promotion is performed with intention to develop brand awareness. Examples/trials are given that is fruitful in attracting early on adopters and prospective customers. Promotional programs will be more essential in this phase. It is as much important concerning produce the product because it positions the product.
Growth Stage
In this stage, company's sales and profits begins increasing and competition also begin to increase. The merchandise becomes well recognized at this stage plus some of the buyers duplicate the purchase patterns. During this stage, firms concentrate on brand choice and increasing market share. It really is market acceptance level. But due to competition, company spend more in advertisements to encourage customers so profits may decline close to the end of expansion stage.
Affect on 4 P's of marketing can be as under:
Product
Along with retaining the existing quality, new features and improvements in product quality may be done. All this is performed to compete and maintain the market show.
Price
Price is managed or may increase as company gets high demand at low competition or it can be reduced to grasp more customers.
Distribution
Distribution becomes more significant with the increase demand and acceptability of product. More channels are added for rigorous distribution to be able to meet increasing demand. On the other hand resellers start getting interested in the merchandise, so trade discounts are also little.
Promotion
At growth level, campaign is increased. When acceptability of product boosts, more efforts are created for brand choice and loyalty.
Maturity stage
At maturity stage, brand understanding is strong so sale continues to grow but at a declining rate when compared with past. At this time, there tend to be more competition with the same products. So, companies protect the market share and extending product life circuit, alternatively than making the profits, By offering sales marketing promotions to encourage dealer to provide more shelf space to the product than that of competition. At this stage usually devoted customers make purchases.
Marketing combination decisions include:
At maturity level, companies add features and improve the product in order to be competitive in market and differentiate the merchandise from competition. At this time, it's best way to get dominance over rivals and increase market share.
Price
Because of strong competition, at maturity stage, price is reduced in order to contend. It attracts the purchase price conscious portion and retain the customers.
Distribution
New channels are added to face extreme competition and bonuses can be found to sellers to get shelf inclination over competition.
Promotion
Promotion is done in order to produce product differentiation and commitment. Incentives are also wanted to draw in more customers.
Decline stage
Decline in sales, change in tendencies and unfavorable monetary conditions explains decline stage. At this stage market becomes saturated so sales declines. It could also be due complex obsolescence or customer flavour has been altered.
At decline stage company has three options:
Maintain the product, Reduce cost and finding new uses of product.
Harvest the merchandise by reducing marketing cost and continue offering the merchandise to loyal niche market until zero income.
Discontinue the product when there is no earnings or a successor can be found. Selling out to competition who wish to keep the product.
At declining stage, marketing blend decisions depends on company's strategy. For instance, if company want to harvest, the merchandise will stay same and price will be reduced. In case of liquidation, resource will be reduced drastically.
EXAMPLES FROM DIFFERENT SECTORS
http://www. ithappensinindia. com/wp-content/uploads/2010/09/BPL-Television. jpg BPL TELEVISIONS
Many products generally have a characteristic known as 'perishable distinctiveness". Which means that a product which is particular when new degenerates through the years into a commodity. The process where the distinctiveness little by little disappears as the product merges with other competitive products, has been rightly termed by Joel Dean as "the pattern of competitive degeneration". The cycle commences with the technology of a fresh product and it is often followed by patent protection, and additional development to make it saleable. Normally, this is followed by a rapid enlargement in its sales as the merchandise gains market approval. Then competitors enter the field with imitation and rival products and the distinctiveness of the new product starts diminishing. The quickness of degeneration differs from product to product. While some products fail immediately on delivery or just a little later, others may live long enough. BPL's picture in picture Television set was taken away at the introduction stage itself. The development of a new product and its own degeneration into the product is termed as the life routine of something.
There are five unique stages in the life span cycle of something as shown below :
Introduction. Research or engineering skill leads to product development. The product is placed on the market; recognition and popularity are minimal. You will find high promotional costs. Sometimes something may generate a fresh demand, for example, Maggi. Volume of sales is low and there could be heavy deficits.
Growth. The product commences to make speedy sales gains due to cumulative ramifications of introductory promotion, circulation, and word-of-mouth affect. High and sharply growing gains may be witnessed. But to sustain growth, consumer satisfaction must be ensured at this stage.
Maturity. Sales development remains, but at a diminishing rate, because of the declining number of prospects who remain unaware of the merchandise or who've taken no action. Also, the last of the unsuccessful competing brands will most likely withdraw from the market. For this reason, sales are likely to continue to rise while the customers for the withdrawn brands are mopped up by the survivors. There is no improvement in the product but changes in selling effort are common. Profit margins slip despite rising sales.
Saturation. Sales reach and stick to a plateau marked by the amount of substitution demand. There may be little additional demand to be activated.
Decline. Sales get started to decrease absolutely as the clients commence to tire of the product and the merchandise is gradually edged out by better products or substitutes, for example, dial telephones and petrol jeeps.
http://www. mbaknol. com/wp-content/uploads/2010/06/product-life-cycle. jpg
Time
Fig 2: product life-cycle of BPL TV's
There are the key reason why the life-cycle of something tends to be short : (a) ongoing research for product development, (b) simultaneous endeavors by several companies in the same route, and (c) tendency of a fresh idea to appeal to competitors. Improvements provided by one company are likely to be met and, when possible, exceeded by opponents in a comparatively short time. In case a competitor hits upon a real improvement (perhaps predicated on an completely new technology) and he markets it well, both profits of the initial technology) and he markets it well, both sales and profits of the initial product innovator may drop drastically.
It may be observed that products may get started a new routine or revert to an early on stage because of this of (a) the finding of new uses, (b) the looks of new users, and (c) launch of new features.
As the distinctiveness of the products fade, the charges discretion loved by their companies gradually declines. This is exactly what happened in the case of many products like ball-point pens, transistors, radios, etc. Throughout the cycle, changes take place in cost and promotional elasticity of demand as also in the creation and syndication costs of the merchandise. Pricing policy, therefore, must be adjusted over the many phases of the circuit.
Product life-cycle concentrates only the life-cycle of something beginning with its introduction in to the market to the post-marketing stage. However, some processes are to be performed by the management even prior to the introduction of a product on the market. These processes include exploration, screening process, analysis, development, evaluation, etc. The concept of product life-cycle can be utilized as a managerial tool.
Marketing strategies, however, need to be modified with changes in the stage of the life-cycle of something. A knowledge of the cycle is helpful to the managers for a rational understanding of the future sales activities as also planning of marketing strategies. Hence, PLC is synonymous with the pattern of demand for something as time passes.
The amount of time that a product spends at anyone level ranges from product to product. A product might not go through every level in the cycle. Some products, for illustration, might not see through the introductory stage, while others might not get past the growth or even the maturity stage. There could be still other products that may go through the introduction to maturity phases but might take a longer time to reach the saturation stage and hence usually takes a longer period to attain the decline stage. Some products, for case, might not get past the maturity stage. There might be still other products that might pass through the advantages to maturity periods but might take a longer time to reach the saturation stage and hence usually takes a longer period to attain the decline level. Some products might even hustle through the whole cycle within an amazingly short period. Using cases, there could even be a repositioning of a product, which might activate off a new growth pattern. Repositioning consists of changing simply the image or the perceived uses of a product.
http://www. geek4share. com/wp-content/uploads/2012/10/Facebook-Like-or-Dislike. jpeg FACEBOOK
Is Facebook Getting close the finish of Its Product Life Circuit?
http://www. dineshbakshi. com/phocadownload/product-life-cycle. jpg
Fig 3: product life-cycle of Facebook
Yes. If you're a potential Facebook stakeholder seeking to benefit from the social-networking site - as an investor or major marketer - beware of all the Facebook media hype. Facebook appears to be approaching the end of its product life routine.
True, Facebook has 1 billion+ users worldwide and appears to be in the proverbial catbird couch. However, urgent extreme caution is advised.
"You can not be serious, " you're probably thinking, "Facebook is huge. "
Firstly, consider: Facebook needs advertising revenue to sustain itself.
However, Facebook continues self-destructing with highly doubtful methods by incurring the wrath of the advertising industry and other stakeholders.
In addition, a 2012 reveals that social marketing, especially Facebook, only gives 1 percent of an e-commerce site's income.
Furthermore, the seemingly constant Facebook buzz is apparently masking some serious red flags, especially, if you're a major trader or marketer counting on it as an advertising medium Why? Published data signifies Facebook is demonstrating signs that it could have advanced too much along its product life cycle (PLC) so that you can reap a significant roi.
A PLC, of course, runs from the time when a product is unveiled to advertise to when it's no longer feasible because of what industry considers superior opponents.
The PLC stages:
Introduction
Growth
Maturity
Decline
In marketing, the PLC is important. Inside the introduction stage, sales are insignificant until the branding takes effect. Think in conditions of an bell curve. The steeper the slope of the development stage, the bigger sales revenue you love. Maturity is the stage when a product achieves saturation. Decrease is merely as the term implies.
Recent data shows a savvy investor or marketer would want to think twice about Facebook. That's because Facebook shows up it's in the downward slope of its PLC curve in key marketplaces. Yes, as amazing as it appears, Facebook appears to be already in its PLC level 3 of reaching maturity - en route to level 4 of your decline in attractiveness in many of the world's most-important markets.
The first red flag about Facebook's PLC appeared in this headline: Facebook Views Big Traffic Drops in US and Canada -Inside Facebook.
"Most prominently, america lost nearly 6 million users, slipping from 155. 2 million at the start of May to 149. 4 million by the end of it, " composed Eric Eldon. "This is actually the first time the united states has lost users before yr. Canada also dropped significantly, by 1. 52 million right down to 16. 6 million, although it has been fluctuating around that quantity for the past year. Meanwhile, the uk, Norway and Russia all submitted losses of more than 100, 000. "
Strangely, Inside Facebook accounts the communal networking site grew. But how?
"Most of the new users continue to come from countries that are relatively past due in adopting Facebook, as has been the craze for the past year, " discussed Mr. Eldon.
Facebook later rejected it's losing associates in North America and European countries.
Facebook's demise is illustrated by other indicators.
WebProNews originally posted some eye-opening data from YouGov BrandIndex covering Jan. 3 to June, 13, 2011, which ultimately shows Facebook has had some serious erosion in word-of-mouth. (Word: If you ask me, WebProNews articles should be taken seriously. )
To determine its Excitement score, which can range between 100 to -100, YouGov BrandIndex asked respondents:"If you have observed anything about the brand in the last two weeks, through advertising, reports or word of mouth, was it positive or negative?"
In compiling the answers, the firm's Hype ranking is then determined by subtracting the negative response from positive. Equal negative and positive replies lead to a zero score.
The eye-opening YouGov BrandIndex ratings:
Adults, 35-49, the Jan. rating of 28. 5 plummeted to 10. 4 in June
Adults, 18-34, the Jan. report of 36. 2 fallen to 22. 7 in June
Meanwhile, consider Twitter's success as reported in this NewsFactor Network headline, Pew Research Finds Meteoric Growth in Twitter Consumption.
"A meteoric surge in Twitter utilization has been reported by the Pew Research Center, even though only 13 percent of online parents use Twitter, " stated NewsFactor Network in the article's conclusion. "Pew also discovered that about 50 % of Twitter users gain access to the service on mobile phones, and African-Americans and Latinos have high Twitter adoption rates. Twitter expects more development with photo writing. "
Facebook does not work in B2B advertising. Understand, however, if you are marketing anything, you still need to maintain a presence on Facebook to keep your Internet standing strong. Facebook's marketing power is B2C.
But if you are counting on Facebook to create a strong go back on your advertising investment, my sense is recent signals are not positive. That's true, too, for disappointed buyers in Facebook's IPO in 2012.
