Product life cycle advantages and disadvantages

Product life cycle advantages and disadvantages:

The Product Life Cycle (PLC) is a well-established marketing idea that explains the steps a product goes through from its launch to its final fall in the market. This model is widely used by businesses to understand and handle their products successfully. By analyzing the PLC, businesses can make informed choices about product plans, marketing efforts, and resource allocation. However, like any business model, it comes with product life cycle advantages and disadvantages, which can greatly impact a product’s success and life in the market. In this essay, we will discuss these benefits and disadvantages in depth.


Advantages of the product life cycle

Strategic Planning: The PLC offers a structured platform for strategic planning. By knowing which stage a product is currently in, companies can develop suitable strategies to leverage its strengths or address its weaknesses. For example, during the introduction stage, heavy spending on marketing and advertising can help establish the product’s presence in the market.

Resource Allocation: The PLC helps in ideal resource allocation. Different stages of the product life cycle require different amounts of resources and care. In the growth phase, for instance, businesses may need to invest more in production capacity to meet growing demand. On the other hand, during the decline phase, it might be more wise to lower investments in the product and transfer resources to newer or more hopeful offers.

Market Insight: By closely watching the PLC, businesses gain valuable insights into market trends and customer choices. This information can be used to spot opportunities and possible threats, allowing businesses to adapt their products and marketing plans appropriately.

Product growth: Understanding the PLC helps in finding product flaws and places for growth. Regular reviews of the product’s performance at each stage can lead to necessary upgrades or innovations, ensuring that the offering stays competitive throughout its life cycle. This continuous improvement method can boost customer happiness and loyalty.

Product Portfolio Management: Businesses often have a range of goods in different stages of the PLC. By analyzing their product portfolio, businesses can balance the risk and return of their offers. A well-diversified portfolio with goods in different stages can help minimize the effect of one product’s fall.

Competitive Advantage: Recognizing the stage of a product’s life cycle can lead to competitive benefits. For instance, in the maturity stage, when competition increases, companies can differentiate their goods through unique selling ideas or value-added services. Understanding the PLC can help companies stay ahead of the competition and maintain a strong market position.

Industry Standards: The PLC regularly sets industry standards and goals. By knowing the normal life cycle pattern of goods in a particular industry, businesses can align their strategies with industry norms, which can enhance their trustworthiness and customer trust.

Here are some specific examples of how businesses have used the advantages of the product life cycle.

Apple: Apple has been very successful in offering new goods in the growing stage of the PLC. For example, the iPhone was launched in the growth stage of the smartphone market, when there was a lot of demand for smartphones but not many big players in the market. This helped Apple gain a large market share and become the top smartphone manufacturer in the world.

Coca-Cola: Coca-Cola has been very good at keeping its market share in the mature stage of the soft drink market. The company has done this by constantly innovating and releasing new goods, such as Diet Coke and Coke Zero. Coca-Cola has also been very successful in marketing its products to new groups of customers.

Netflix: Netflix has been very successful in extending the maturity stage of the DVD renting business. The company has done this by providing a streaming service that allows people to watch movies and TV shows online. This has helped Netflix reach a bigger audience and grow its business, even though the DVD rental market is in decline.

Overall, the product life cycle is a useful tool for companies to understand the lifecycle of their goods. By knowing the PLC, businesses can make better choices about product development, marketing, and pricing. This can help companies gain a competitive edge and achieve their business goals.

Disadvantages of Product Life Cycle:

Uncertain Durations: One of the major disadvantages of the product life cycle is the unpredictability associated with the length of each step. Predicting how long a product will stay in each stage is difficult, as various external factors, such as market changes, technological advances, or unexpected events, can alter the speed at which a product goes through its life cycle. This instability can make long-term planning tough for businesses.

Costly Introduction Stage: The introduction stage can be expensive for companies due to heavy investments in product development, market research, and marketing efforts. There is no promise of success during this stage, which can lead to major losses if the product fails to gain support.

Marketing Challenges: Each stage of the PLC needs different marketing methods. Companies must constantly change their marketing strategies to suit the changing needs of their goods and their target audiences. This steady adaptation can be both time-consuming and resource-intensive for businesses, especially smaller ones with limited marketing funds.

Product Cannibalization: In bigger companies with diverse product lines, a new product’s success may come at the expense of current goods. This phenomenon, known as product cannibalization, can negatively impact total sales and is a major disadvantage of the product life cycle.

Decline Stage Difficulties: The decline stage can be particularly difficult to handle. Despite the product’s waning fame, there may still be a small, loyal customer group. Businesses must decide whether to continue catering to this narrow market or abandon the product altogether. Discontinuing a product can be mentally difficult, especially if it was once a flagship offering.

Market Saturation: In mature markets, where most potential customers already own the product, growth possibilities become limited and price competition strengthens. This can lead to reduced profit margins and a fight to stand out among rivals.

Here are some specific examples of how the disadvantages of the product life cycle can impact businesses:

A business might launch a new product in the growth stage of the PLC, only to find that the market conditions have changed, and the product is not as popular as imagined.
A business might invest heavily in a product that is in its maturity stage, only to find that the product's sales start to drop unexpectedly.
A business might use the PLC to make decisions about product development, marketing, and pricing, only to find that the predictions they made about the PLC were not true.

Overall, the product life cycle advantages and disadvantages is a useful tool for companies to understand the lifecycle of their goods. However, it is important to remember that the PLC is not always true, and businesses should not depend on it as the main basis for making decisions about their products.

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