🔄 Product Life-Cycle Management (Marketing)

What product life-cycle management (PLM) is and where the concept comes from
The goals of PLM
The product life cycle (PLC) and its three assumptions
Managing the offering and the pressure to sell a product within its life
Strategies for extending the product life cycle
The stages used to characterise the PLC, including Harold W. Fox's five-stage model
Utilising the product life cycle: Levitt's three operating questions
The difficulty of identifying a product's stage, and the role of user-generated content

💡 What Is Product Life-Cycle Management?

Product life-cycle management (PLM) is the succession of strategies by business management as a product goes through its life-cycle.

The conditions in which a product is sold (for example advertising and saturation) change over time.
These conditions must be managed as the product moves through its succession of stages.

Origin of the concept

The economist Theodore Levitt referred to the concept in a 1965 Harvard Business Review article.
He observed that "most alert and thoughtful senior marketing executives", and even "a handful of uniquely cosmopolitan and up-to-date corporate presidents", were by then "familiar with the concept of the product life cycle".
However, he felt they still needed to move forward in using it commercially.

🎯 Goals of PLM

The goals of product life cycle management are to:

Reduce time to market
Improve product quality
Reduce prototyping costs
Identify potential sales opportunities and revenue contributions
Maintain and sustain operational serviceability
Reduce environmental impacts at end-of-life

Supporting points

To create successful new products, the company must understand its customers, markets and competitors.
PLM integrates people, data, processes and business systems.
It provides product information for companies and their extended supply chain enterprise.
PLM solutions help organizations overcome the increased complexity and engineering challenges of developing new products for the global competitive markets.

📈 The Product Life Cycle (PLC)

The concept of product life cycle (PLC) concerns the life of a product in the market with respect to business/commercial costs and sales measures.

The product life cycle proceeds through several phases.
It involves many professional disciplines.
It requires many skills, tools and processes.

Three assumptions of PLC management

Products have a limited life, and thus every product has a life cycle.
Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller.
Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Managing the offering

Once the product is designed and put into the market, the offering should be managed efficiently so that buyers get value from it.
Before entering any market, the industry carries out a complete analysis of both external and internal factors, including:
- laws and regulations
- environment
- economics
- cultural values
- market needs
From the business perspective, as a good business, the product needs to be sold before it finishes its life.
In terms of profitability, expiry may jolt the overall profitability of the business. Therefore, a few strategies are practiced to ensure that the product is sold within the defined period of maturity.

🚀 Extending the Product Life Cycle

Extending the product life cycle by improving sales can be done through the following approaches.

Approach	Description
Advertising	Its purpose is to get additional audience and potential customers.
Exploring and expanding to new markets	By conducting market research and offering the product (or some adapted form of it) to new markets, it is possible to get more customers.
Price reduction	Many customers are attracted by price cuts and discount tags.
Adding new features	Adding value to the product to enhance its usability or to attract the attention of a wider customer base.
Packaging	New, attractive, useful or eco-friendly packaging influences the target customers.
Changing customer consumption habits	Promoting new trends of consumption can increase the number of customers.
Special promotions	Raising interest by offering Jackpot and other offers.
Heightening interest	Many things attract customers who match certain profiles (see below).

Examples of "heightening interest"

Eco-friendly production processes
Good work conditions
Funding the efforts of non-profit organizations (cancer cure, anti-war efforts, refugees, GLTBI, environment and animal protection, etc.)

Something important to notice is that all these techniques rely on advertising to become known. Advertising needs the others to target other potential customers and not the same over and over again.

🧭 Characteristics of PLC Stages

Four of five stages are typically used to characterise the product life cycle.
Harold W. Fox referred to a five-stage "sales model" in 1975.

Fox's five stages

Precommercialization (also referred to as "development")
Market introduction
Growth
Maturity
Decline

The four-stage model

The four-stage model consists of introduction, growth, maturity and decline.

Stage	Sales	Profit	Competition	Marketing focus
Introduction	Low, building slowly	Negative or very low, because of launch costs	Little or none	Build awareness and encourage trial
Growth	Rising rapidly	Increasing	Growing as new rivals enter	Build brand preference and widen distribution
Maturity	Peak, then levelling off	Highest, then under pressure	Intense	Defend market share and differentiate
Decline	Falling	Falling	Shrinking as firms exit	Cut costs, harvest, or phase the product out

🛠️ Utilising the Product Life Cycle

Whilst Levitt noted that the concept of the product life cycle was well-known, he argued that it was being underused.
He believed it had greater potential to support business strategies than had been considered at that time.

Levitt's three "operating questions"

Business executives should ask and answer questions concerned with:

Predicting the shape and duration of each stage
Determining a product's current stage in the cycle
Making use of this assessment

Identifying the stage of a product

Identifying the stage of a product is an art rather than a science.
It is nonetheless possible to find patterns in some of the general product features at each stage.
Identifying product stages when the product is in transition is very difficult.
More recently, it has been shown that user-generated content (UGC) (e.g., in the form of online product reviews) has the potential to reveal buyer personality characteristics, which can in turn be used to identify the product life cycle stage.

Product Life Cycle: Marketing Study Notes