Use of Product Life Cycle Assignment Sample

• Subject Name : Management

Research Operations Report

Introduction to Product Life Cycle

Every product that enters the market has a life and eventually retires after circulation in the market (Asiedu & Gu, 1998). This process, called the Product Life Cycle, is the journey of a product from birth to development and ultimately decline. The Product Life Cycle maps out the entire life of a particular product for a company in order for the marketers, managers and designers to understand the requirements of the consumers and develop strategies accordingly that make the best use of the stage the product is currently at (Interaction Design, 2016). This helps in promoting the overall success of a product in a market place to its full capacity (Interaction Design, 2016). Knowing what phase a product is currently at can offer various insights into the marketing strategies, production requirements etc. A product goes through four main stages during its lifetime: the introduction phase, growth phase, maturity phase and the decline phase. These phases, in most cases, occur in this order itself. The durations of these phases and the productivity of the product in these phases differs according to the product, the market and the marketing methods. Eventually, all products phase out of the market due to various factors including competition, reduced demand, loss or other such factors (Asiedu & Gu, 1998).

Uses of Product Life Cycle

After a new product development, the product is launched in a particular market. By using the Product Life Cycle tool, an individual can gain insights about the specific requirements of the market and the product. Understanding the Product Life Cycle is especially important for the Introduction phase of a product. It is important to remember that 95% of new products that are launched in a market fail to survive (). The key is planning well. Before launching a product, it is essential that the marketers understand the requirements of the growth phase and have charted out a stable marketing plan. A marketing plan will help companies reduce the amount of time spent on execution and will also help them be prepared in case a plan does not work out successfully. Thorough understanding of the introduction phase can also help marketers deduce the market entry costs (Anderson & Zeithaml, 1984). Understanding the Introduction phase will help the team understand the target audience, the message the product wants to send across, the medium by which the message will be sent and the approach that will be adopted related to a particular (Anderson & Zeithaml, 1984).

With the help of Product Life Cycle, one can elaborate on the maturity phase of a product. During the maturity stage, the sales flatten out (Anderson & Zeithaml, 1984) and reach a stability of sorts. This is a good time for companies to be innovative. From here, the companies can decide to expand into other markets provided they have a need for the product. Even if the need is not present, the company can use various strategies to develop a need for the product in the market. The company also plans the future steps and the path it wants to take from there on. Planning and researching are essential in the maturity phase as the company decides what it wants to do with that specific product (Anderson & Zeithaml, 1984).

Understanding the Product Life Cycle can also help avoid the decline of the product by reinventing various aspects of the product (Östlin, Sundin & Björkman, 2011). The company can decide if it wants the product to eventually retire or they want to launch the same product with some remodels and updates. Most products that are established in a particular market (like Apple products) keep reinventing and upgrading their models in order to avoid the decline phase. However, in order to reinvent, the company has to have special insights into the needs of the customers and make appropriate technological and physical changes (Anderson & Zeithaml, 1984). Proper planning and execution are also important for re-launching variants of an existing and matured product.

Developing a Product Life Cycle can help marketers develop a sense of forecasting and understanding the competitive advantage (Day, 1981). With enough experience, a marketer develops knowledge regarding forecasting the journey of a product through the Product Life Cycle (Day, 1981). With enough knowledge, it becomes easier to estimate the level of sales a product will achieve and subsequently chart out a suitable plan for the product. Apart from that, a Product Life Cycle can also be used for a competitor’s product. This offers various insights into what plans and processes are being employed by the competitor in developing their product (Day, 1981). Once these insights are gained, the company can come up with alternative plans that promote their product over the competitors. 

Components of a Product Life Cycle

According to Littell (2016), the Product Life Cycle is essentially needed for data about a particular product which enables individuals to make decisions of the basis of the data. The data present in a Product Life Cycle gave information about the level of sales for a particular product in comparison to other phases in the Life Cycle. This also helps individuals observe a pattern in the sales of a particular product which can then help draw inferences on the basis of that and chart out the future steps that need to be taken. Observing what phase of the life cycle a particular product is at can also help gain various insights.

The 4 main stages of a Product Life Cycle are the introduction, growth, maturity and declining phases. Each phase has a different meaning and different implications regarding the product. Understanding these phases is essential for interpreting a Life Cycle. It is also essential that the data is accurately present in the Product Life Cycle and is easily interpretable in order to draw inferences from the same.

The introduction phase is very important in the Product Life Cycle. Introduction phase is when a new product is launched in an existing market (He et. al., 2019), an existing product is launched in a new market or a new product is launched in a new market. It is in the introduction phase that the market value and quality will be determined. The sales volume is low in the beginning and may or may not slowly depending on the market performance (Interaction Design, 2016). In the introduction phase of a product, marketing is very essential. The customers need to be educated about the product and encouraged to avail its services (Interaction Design, 2016). It is important to understand that most new products don’t make it past the introduction phase due to poor planning and execution of the marketing strategies. Hence, it is essential that proper planning is done, proper tab is kept on the sales level and alternative strategies are ready in case they are required. For a product to be accepted by the market, it has to reach the growth phase from the introduction phase.

When the product reaches the growth phase after successfully clearing the introduction phase, the quality and pricing of the item is maintained. The marketing team can take efforts to widen the distribution and the target audience for the product (Interaction Design, 2016). In this phase, the team focuses on increasing the sales as much as possible and coming up with various strategies, sales and promotions to facilitate the sale of the product. If the product has reached this phase, the sales are expected to rise appreciably compared to the previous phase (Interaction Design, 2016). Along with that, the profitability of the product, demand and brand awareness also rise. Some competitors may try to enter the market in this phase and try to compete with the product (He et. al., 2019). Marketers should always expect competition in the growth phase and be ready with various strategies to combat such situations.

Next comes the maturity phase. In this phase, companies normally try to enhance the features of their products in order to differentiate them from the competitors (Interaction Design, 2016). The distribution becomes intense and there is a need for marketers to be more innovative with the brand. It is at this phase that the brand has reached maturity and market saturation (the highest peak). Somewhere along the maturity phase, the profitability of the product begins to decline (Interaction Design, 2016). In some companies, the maturity phase of the Product Life Cycle is further broken down into two spate but overlapping phases: the maturity phase and the saturation phase (He et. al., 2019). Generally in the maturity phase, the momentum of the product’s grown either climaxes or plateaus (Polli & Cook, 1969).

The last phase that a product enters before ceasing to exist is the declining phase. In this phase, the company either becomes a legacy or attempts are made to make changes in the product and launch it again in the market (Polli & Cook, 1969). The cost of the product severely reduces as compared to the other phases. Finally, the product is discontinued and stopped from production once its need disappears from the market. The sales go down significantly and in all probability, the product’s place in the market is taken by a better and more affordable product (Interaction Design, 2016). The profitability becomes almost negligible at this point of the life cycle. From here, in most instances the product is discontinued by the company.

It should be noted, that the duration of the Product Life Cycle is not also predictable. The life cycle may last for 3 months or go on for 30 years. The length of the lifecycle and each phase of the life cycle depend on various factors. One such important factor is the need for the product in the society. While some products might lose their need over-time and with the development of technology and innovation (like reduced dependency on telephones production due to the presence of mobiles), the need for certain products lasts for a longer time. Similarly, the length of each phase depends on the product, the market, the necessity and other such factors.

Representation of a Product Life Cycle

Author/Copyright holder: Malakooti, B. Copyright terms and licence: CC BY-SA 4.0 (Interaction Design, 2016)

Connection in between PLC and Operations Management

It is essential that an operations manager understands the principles and usage of every phase in the Product Life Cycle. By understanding the requirements at every phase, the manager can come up with a set of organizational strategies that can be applied to the product and company. These organizational strategies can be specific to the requirements of the product and the company.

Understanding the Product Life Cycle can also help improve the operations of a company (Cohen & Whang, 1998). Once the information about the type of product is known, it becomes easier to manage the finances related to it. Planning a Product’s Life Cycle can offer insights on the expected expenditure which can in turn help the manager manage the finances and funds related to the product. This ability will also enable the manager to take informed decisions along with helping the manager come up with various strategies to maximize the profit made by the company (Cohen & Whang, 1998). Along with the finances, the Product Life Cycle also provides the manager with excess information and data. This data is important to assess how successful marketing strategies are and other related functions. The Product Life Cycle collects such data and passes it on to the manager who then draws inferences from it and takes decisions accordingly. One of the most important benefits of the PLC is also the improved communication and coordination amongst departments (Cohen & Whang, 1998). With the data that the cycle provides, various departments are able to act on it in order to maximize the profits of the company. This data enables a better communication amongst various departments, if properly utilized by the manager.

The product life cycle also enables impacting the pricing strategies of a particular product ((Ma, Harstvedt, Dunaway, Bian, & Jaradat, 2018). On the basis of the life cycle phase a product is currently at, the manager can vary the pricing strategy. On the introduction phase, the cost of development is usually high with low sales and profits, and thus the pricing strategies are applied in a way that fits in with the budget of the company (Ma et. al., 2018). Most businesses price their product with a higher or lower than required price in order to facilitate different kinds of growths. In the growth phase the demand for the product increases and in this phase the pricing strategies are, in all probability, lowered to facilitate faster sales. The presence of competition in the growth phase can also affect the pricing strategies respectively (Ma e. al., 2018). Similarly, the pricing strategies in the maturity phase and the decline phase are set according to the requirements of the company. In some cases, discount pricing strategies are implemented to facilitate sale despite the decline (Ma et. al., 2018). The strategy of competitive pricing is also used by various managers depending upon the data from the Product Life Cycle.

Apart from that, other operational strategies like selective distribution, product modification, market mix modification or harvesting can be employed by the manager if the need arises depending on the data provided by the Product Life Cycle. Understanding the data offered by the PLC can help in better decision making in situations that arise related to a particular product.

Limitations of the Product Life Cycle

While the Product Life Cycle is an easy and efficient tool, it does have certain limitations of its own that every manager needs to be aware of. Steps should be taken in order to minimize the effects of such limitations on the product and the company. According to Rink and Swan (1979), the use of Product Life Cycle can cause a few managers to be too rigid about their strategies. It is essential for every manager to be flexible and mold according to a particular situation that the product might find itself in. It is important to remember that the PLC is not a fixed script and things can always go different from the plan and predictions, and hence the manager should ensure that she/he is not completely dependent on it.

It has also been pointed out that the predictions of the PLC work better when the environment is relatively stable. In times of uncertainties, these predictions become much more difficult to obtain (Rink & Swan, 1979). It is known fact that reality can differ widely from theory and this again is an indication that the manager needs to be prepared for the worst. Lastly, in the case of PLC, previous data does not hold any value (Rink & Swan, 1979). The historical data about previous products will not help the manager determine the growth of another product. Each product has its own growth pattern and different operational strategies are applied to it on the basis of its performance in the market.

References for Research Operations Report

Anderson, C. R., & Zeithaml, C. P. (1984). Stage of the Product Life Cycle, Business Strategy, and Business Performance. Academy of Management Journal, 27(1), 5–24.

Asiedu, Y., & Gu, P. (1998). Product life cycle cost analysis: State of the art review. International Journal of Production Research, 36(4), 883–908.

Cohen, M. A., & Whang, S. (1997). Competing in Product and Service: A Product Life-Cycle Model. Management Science, 43(4), 535–545. https://doi.org/10.1287/mnsc.43.4.535

Day, G. S. (1981). The Product Life Cycle: Analysis and Applications Issues. Journal of Marketing, 45(4), 60–67.

He, B., Luo, T., & Huang, S. (2019). Product sustainability assessment for product life cycle. Journal of Cleaner Production, 206, 238–250.

Interaction Design. (2016). How to Use the Product Life-Cycle. Retrieved from https://www.interaction-design.org/literature/article/how-to-use-the-product-life-cycle

Littell, N. (2016). Components of Product Lifecycle Management and Their Application within Academia and Product Centric Manufacturing Enterprises. ASEE EDGD Midyear Conference, 12, 87–91.

Ma, J., Harstvedt, J. D., Dunaway, D., Bian, L., & Jaradat, R. (2018). An exploratory investigation of Additively Manufactured Product life cycle sustainability assessment. Journal of Cleaner Production, 192, 55–70.

Östlin, J., Sundin, E., & Björkman, M. (2009). Product life-cycle implications for remanufacturing strategies. Journal of Cleaner Production, 17(11), 999–1009.

Polli, R., & Cook, V. (1969). Validity of the Product Life Cycle. The Journal of Business, 42(4), 385.

Rink, D. R., & Swan, J. E. (1979). Product life cycle research: A literature review. Journal of Business Research, 7(3), 219–242.

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