What is Product Life Cycle

With the evolution of the world, the products and services we have been using for ages have also evolved. Where once we used a small box television with cable, we now use flat-screen LED TVs with in-built OTT apps and superior control systems. These modern technologies have not appeared overnight. They have been researched, developed and promoted by their creators and gradually been adopted by the public. Such is the case for most of the products you purchase; each one has a journey of its own. And this is what the theory of product life cycle explains. With applications in several marketing and business phenomena, this theory provides valuable insight into the importance of keeping up with market trends. So let's decode this theory and understand it better with online assignment help from Locus Assignments, a trusted assignment helper UK for students.

What is Product Life Cycle?

In simple words, the theory suggests the transitional phases of a product, i.e. the stages of development a product moves through in the marketplace as it enters, becomes established, and exits the marketplace. Graphically, it is represented as the relationship between the sales of a product and time. Developed by Raymond Vernon in 1966, it illustrates how products respond to changing market trends and aids in the analysis and development of strategies for products as they enter and exit each stage.

The Stages of Product Life Cycle and How They Work

Any product usually begins with an idea. This idea is followed by research, development and implementation, i.e. if it is deemed feasible and potentially profitable. Once the initial R&D stage is complete, the four stages in the lifetime of a product begin. Let’s take a look at the product life cycle stages with examples, one by one:

Introduction Stage

The first stage starts when the product is launched into the market for consumers. The primary goal for the business is to promote the product through marketing and advertising, create consumer awareness and ultimately create demand for the product. During this stage, sales are at a minimum, and companies invest heavily in promotion, incurring high costs and negative financial results in the process. 

For example, Augmented Reality Glasses like Apple Vision Pro which are still in the early experimentation and launch phase.

Growth Stage

Coming right after the introduction of the product, the growth stage is where sales for the product gradually start rising. This phase of a product can be recognised when the product becomes more popular and recognisable through growing demand, an increase in production and higher availability. Revenue increases, but so does competition from rivals, so companies still invest heavily in marketing to expand and differentiate their products.

For Example, Companies like Tesla are in the growth stage for electric vehicles (EVs). Acceptance of the product in the market is increasing with a gradual increase in competitors and accelerating sales. The market is expanding rapidly.

Maturity Stage

After high growth, the product in the maturity stage reaches peak sales and maximum profitability. But with high competition and market saturation, growth rates start to decrease and profit margins start to shrink. Companies in this phase start to innovate and diversify their products to bounce back in the market with the help of feedback, surveys and study of current market trends.

For example, a well-established product like Samsung Galaxy or Apple’s iPhone in the smartphone industry, with intense competition, slower growth and differentiation through innovation, design, and features.

Decline Stage

The final stage of the product life cycle, the decline stage, occurs when increased competition is overpowering and the product’s market share begins to decline. This continuous drop in demand and sales is caused by higher availability of substitute products, changes in market trends or introduction of newer innovations. Companies respond to this by either completely revamping the product or choosing to discontinue it in the market due to losses.

For example, Landline telephones and DVD players are being replaced due to the establishment of the smartphone industry and the rise of OTT platforms, respectively.

These four stages provide a comprehensive picture of what the growth and decline of a product looks like, along with how companies and consumers respond to each stage. Its importance and applications are still studied in economics and the corporate world. 

Students struggling to relate these concepts to real-life examples can get support from Locus Assignments, a reliable assignment helper UK, which provides practical case studies and insights.

Significance of The Product Life Cycle Theory

The product life cycle offers the following advantages to the market:

Better resource allocation: Since marketers and business developers better understand their product and brand, they are able to reallocate resources to specific products based on the stage they are in.

Growth in innovation: Due to the product life cycle, companies spend more and prioritise innovation and development of their products, leading to long-term consumer welfare.

Strategic Planning: PLC stages help businesses align their strategies effectively for long-term success. This helps in maximising profits and market share. 

Market Positioning: Management of the product life cycle helps in maintaining a competitive edge over rivals. Companies can anticipate market changes and adjust pricing, promotion, and product decisions accordingly to sustain growth.

The theory has many advantages and real-life applications. Yet, like every academic theory, it is important to study the limitations it poses.

Limitations of Product Life Cycle

Its drawbacks are as follows:

Not appropriate for every industry or product: All products in the marketplace don't follow the same predictable pattern. All of them have their unique trajectory of growth, and studying each one of them can be difficult.

Duration of stages varies widely: Even for the industries that do follow the PLC, the stages and their durations might differ by huge margins. 

Planned obsolescence: This often occurs when companies replace products in their maturity stage, even if they still offer value. This leads to product waste and inefficient use of development resources.

External factors: Factors like technology, consumer behaviour, and competition can alter the cycle significantly, and this theory does not account for any of those.

The PLC is a strategic tool, not a fixed rule. Understanding its limitations ensures students learn how businesses use the PLC as a flexible guide rather than a rigid blueprint, helping them make informed strategic decisions.

Conclusion

In conclusion, the Product Life Cycle helps students understand how products evolve in the market, offering insights into marketing, strategy, and innovation. Seeking assignment help from Locus Assignments, a leading essay writing service, can help learners explore these concepts through real-life examples and case studies, making academic learning practical and applicable to future business scenarios.