Introduction:
Marketing is a process which is based on communication and whereby individuals obtain what they need through others creating or exchanging products and value with them. For companies to sell their products, marketing is the most important factor to reach out to customers as Kotler & Armstrong, (2008) define. This essay presents the product life cycle and focuses on its strength and weakness points.
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The concept of Product Life Cycle (PLC):
Product life cycle (PLC): is an idea from cradle to grave and considered sales record of a product time. PLC has four hypotheses: 1. a limitation life of products, 2. each phase has its own different features such as: methods of sales, 3. profits variation throughout the life cycle, 4. strategic methods used at each stage differ (Bennett, 1995 & Thetimes100, 2009).
The Stages of PLC:
PLC has five stages 1. Development (pre-Launch), 2. Launch (Introduction), 3.Growth, 4.Maturity (Saturation), 5.Decline (Thetimes100, 2009).
The development phase:
In this stage, a firm has an idea and tries to make improvements to it, which is done by employing the researching skills for that purpose. This usually costs a lot of money in designing, production, advance promotion and if there were no sales, there would be no profit (Mark, 1998).
The introduction phase:
If the product agreed on, which a firm has decided to launch was its own innovative, unique one, normally, in this case, chances are less that any difficulty get in the way, especially and mainly from competitors. It remains at the beginning of this stage from the 4 Ps’ mentioned previously: promotion and place. A firm needs to create awareness, encourage sales, advertisement, public relations, and most importantly develop an image (Mark, 1998 & Netmba, 2009).
The growth phase:
When a product achieves success, competitors will have reaction that entering market as quickly as possible. As a result promotional cost would increase in this stage for the sake of persuading consumers that the product of ours is better than other competitors (Mark, 1998 & Netmba, 2009).
The maturity phase:
Competitors are rising sharply in the market and there is no space in for new copartners. Firm at this stage will exert all promotion options to preserve its brand loyalty within its own customers. However, at this stage sales and price begin fall down in the same time there are a large several of versions of product. By using different approaches competitors will detach part of market from the firm (Blythe, 2009).
The decline phase:
This is the stage leading towards the end. In other words, it is the stage where the death of the product begins to take place. There are a small number of balance sheet promotion sections which could manage it with. As much as the firm can keep its product on the life, it will still be able to earn some money. However, in this stage, varieties of versions are not available and the price might need to be raised (Blythe, 2009). “In fact, most decision to eliminate products is made on the basis of intuition and judgment rather than any formal analysis” (Blythe, 2009.pp:81-82).
Strengths of the PLC.
When used alongside analysis of sales figures and forecasts, PLC can be a powerful tool in providing guidance and marketing tactics that are appropriate at a particular stage (suite101, 2009).
What are the keys of succeeding?
Clearly, to allow a product to succeed and penetrate the market, it has to fulfill the needs of a sizable number of customers. With new products, this usually occurs automatically when the product possesses some new features which cannot be found in other existing products. Improvement in operation and technology is another cause of success (Dibb et al., 2006).
Weakness of PLC.
Even with using the PLC diagrams, there is no way to predict the length of each phase that the product is going to stagnate at. Furthermore, neither can it be used in forecasting accurately. These are the main failures and weakness points of the PLC model (Know this, 2004 & mind tools, 2009).
What is the fatal mistake which marketers do? Why do some products fail?
The critical major mistake that marketers may neglect is when the product they introduce to the market does not meet the needs of the customer. This occurs for any of the following reasons: 1. the product does not offer value and therefore fails to progress in the marketplace. 2. The branding is ineffective or not well known. 3. Sometimes, the mistakecan be within the design. 4. In some other cases, technical problems appear. Moreover, Distribution and overestimation of the market size problems are considered a huge mistake which marketers can possibly commit (Dibb et al., 2006).
What are the internal and external factors have effects on PLC?
There are many features which effect PLC and the vital of them Product decisions and Consumer behavior.
Product decisions (Internal factor):
Product decisions include those intended to have an effect upon the firm primarily, then product, its sales, and, hence, its lifecycle and not related directly to the consumers. This is so clear in the example of Coca-Cola case below.
Consumer behaviour (External factor):
Decision making process elements are considered many three issues: First: Personal characteristics: personality, lifestyle, motivation, beliefs, attitudes, and perception. Second: Circumstances of the buyer: gender, age, family, life-cycle, income, and education level. Third: Social environment: culture, reference groups, and social class (Hill & O’Sullivan, 1999). These are out-of-control factors that a firm has no hand on. They affect the life cycle of a product and given the name, external factors. In fact, this is not precisely the case. Because this is mainly more related to the customer buying that very product, a fair look at psychology can be devoted here to face any of the problems caused by any of the above factors. If looked more closely at the nature of this situation, one finds that it is concerned with decision-making process area of psychology. As soon as a consumer makes the decision to buy that product, which is what marketers look forward to, the business will begin and the product introduced will continue going through the stages to live its cycle. The external factor effect should be clear in the Kellogg’s example later (Hill, & O’Sullivan, 1999).
Coca-Cola case study
In this case study, it will be shown clearly that some of the products don’t even reach the growth or the maturity stages but straightforward towards the declining stage. This was when Coca-Cola thought to launch its own bottles of water in 1993. “Dasani”, was the marketing name of the product. In the UK, what happened was that the factory had contaminated the bottles with what a cancer-causing chemical called “bromated”. This is different from the chemical substance “bromide”. The factory was using the tap water which comes normally from the Thames River. Then, this is being purified using the reverse Osmosis method of purification. After, this purified water is added to a batch of “Calcium Chloride (CaCl2)” and “bromide”. When Ozone gas is pumped into that batch, the bromide will be oxidized to “bromated”. This was mainly the reason for Coca-Cola to divest this kind of a product. Apparently, for this reason, the water of Thames River is being monitored to check the existence, or the concentration for that matter, is below the 10 micrograms per litre. This clearly shows how the internal factor effect here led to the end of the product (Dibb et al., 2006).
Kellogg’s Nutri-Grain Case study:
In 1997, Kellogg’s has achieved successes for approximately fifty per cent, which was part of the growing a puffed rice of market Perform in short time less than three years. Until 2002, sales continued growing and increasing within new improvements of flavour and ingredient to the original product. Nutri-Grain, as an example, grew gradually to be identified and recognised by the customers themselves. Nutri-Grain has changed customers’ understanding from missing breakfast to become a health daily snack.
All Bran bars and Alpen bars are the main competitors of Nutri-Grain yet the interesting issue about the two is that both are from Kellogg’s itself. However, there are others producing similar products to Nutri-Grain which slightly caused cutting of total profits. Each product of Kellogg’s itself has a life cycle, some of which spend months within one stage and others, such as: Nutri-Grain spent years in only the growth stage.
In the middle of 2004, Kellogg’s noticed that Nutri-Grain sales started falling and losing its position. Meanwhile, the rate of market reached 15% of growing. It is obvious that Kellogg’s should choose one of two decisions, either to withdraw Nutri-Grain or add some improvements to it to return it back to life (Thetimes100, 2009).
Evaluation
Simply, an analogy to the PLC is the life of a being. The living being starts developing from the moment it is born. Next step comes the stage of growth when it becomes a youth through towards maturity when it becomes adult. Finally, it dies which is similar to the withdrawal of a product from the market but before that it gets old; its sales show a decline. Having stated that, it shall be clear as to why be it that not all the products come through the lifecycle phases in the same pattern!
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As figure number 1 shows: The above plot shows the general typical life cycle that virtually every product should go through if no obstacles were on the way but the pattern differs. As expected in the research and development stage, the sales are zero since the product is not introduced to the market yet. Then, once it is introduced, the sales will begin and this is shown on the graph as sudden rise forming a curvature upwards shape. The rise continues until the stage of decline is reached and this is represented as a downward curvature shape indicated that the sales have fallen.
In the development stage, small firms and big firms are not equal in terms of the precautions and the initiatives they take and so for the new and old companies. New Companies are more vulnerable to suffer from the consequences that the old ones and the reason for that is that the old have far more experience than the new firms. Big companies have a strong finical base which allows them to fight in the market with no fear.
As have been stated above, in the introduction phase section, that the awareness and sales encouragement and more importantly the advertising is done actively at this stage. Doing the same kind of comparison between small and big firms, the latter have a variety of products in its production line which, in turn, adds a huge space for marketing activities such as, making ads about two or more products of their own, in other words, promotional effect dominates more than in the small firms.
After passing the first two stages and the product reaches the growth stage safely, competitors reaction did not exist, both of the small and big firms are equal.
However, if their reaction was catalyzed and competition was prevalent, they are not similar in the sense that the potential of each differs. As result, the course of action of each will be different and each will reap the harvest of competitors’ reaction differently, in accordance to their potential.
Some products, although reach their decline stage, do not believe in what is called the decline phase and getting old. As a result, they overcome this problem and regain their position and popularity after taking the necessary strategies. This normally occurs when a little innovative tweak, be it a promotion, or an additional feature that is applied to the existing product.
To reinforce the point of weakness mentioned earlier about the model that it fails to predict the exact time a product will spend at a certain stage, a set of examples are presented and exposed to evaluation. One of the examples is clothing. Cloths cannot be handled, to some extent, somehow to extend its life cycle as it is down to the fashion of the year. So, normally this kind of product lasts for no longer than a couple of months up to a year. (Know this, 2004)
On the contrary, products like cars or bells live longer and can be trusted for at least five years or even more than that. These products’ life cycle, unlike the cloths, can be extended
Products in between are prone to societies. A typical example is mobile phones. In some communities, people consider the mobile phone as fashionable item that is changeable each time a better, newer one is launched to the market. Others are fulfilled with it as being merely a mean of communication and that it is hard to do its job.
Internal and external factors are equally as important. It has been seen in the example above how exceeded legal limit of bromate of a bottle of water has led Coca-Cola’s product towards death directly from the introduction phase; internal phase. Similarly with Nutri-Grain, Realistic snackers interest in healthy food, and it being the only healthy product have forced Kellog’s to revitalize Nutri-Grain, external factor.
Conclusion:
PLC is a brief description or representation of a life cycle of a product in terms of graph. It is one of the powerful analysis tools in business generally and in marketing specifically. PLC mode can imply the possible strategies to be pursued in order to extend the life cycle of the product having known the stage at which the product is at standing.
It can be concluded that in order to overcome this external factor, a marketer needs to play with the elements of decision-making process.
By the death of the product, a complete description of the whole life of the product will be provided by the PLC model that can be used later on in the research and development stage of a new product.
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