Extending Product Life Cycle Stages. Exploring the Product Life Cycle Model and Ways to Extend the Life of a Product
Businesses are always seeking better ways to grow profits and maximize revenue from the sale of products or services. Revenue allows a company to maintain viability, invest in new product development, and improve its workforce, all in an effort to acquire additional market share and become a leader in its respective industry.
A consistent and sustainable revenue stream from product sales is key to any long-term investment, and the best way to attain a stable revenue stream is a Cash Cow. Cash cows are leading products that command a large market share in mature markets. Cash cows display a Return On Investment (ROI) that is greater than the market growth rate, and thus produce more cash than they consume. The question is therefore: How can a company develop a cash cow product? One way of doing so is by applying relevant product planning and/or product marketing strategies, aka competitive moves, at the various stages of a product’s life cycle.
The Product Life Cycle Model (PLC Model) is a relatively new theory which identifies the distinct stages affecting sales of a product, from the product’s inception until its retirement. Companies that successfully recognize these stages and subsequently apply a custom Marketing Mix (combination of product, pricing, promotion, and place [distribution] activities) at each stage, are able to sustain sales and defend or win market share. By deliberately extending the length of time spent at each of the PLC stages through different tactics, companies are also able to realize much of the revenue potential a product can offer.
This chapter introduces the PLC Model, and its merits and faults are addressed. Considerations, ways, and reasons to extend PLC stages are explained. Examples are provided to show how product planning and product marketing strategies can be used at different PLC stages to help establish market dominance and drive sales. This chapter relates to consumers and consumer goods. Consumers are individuals or households that buy and use goods and services created by industries.
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G. Steinhardt, The Product Manager’s Toolkit , Management for Professionals,