Product life cycle management

From ArticleWorld

The Product Life Cycle is the stages a product undergoes over time. In Product Life Cycle Management strategies are used by management in order to successfully move products through the processes towards marketability. There are many phases in the product lifecycle and these require the use of skills, tools and the expertise to many professionals. Product life cycle management (PLC) deals directly with the life of a product in the market and measures its commercial costs and sales. This is different from product lifecycle management (PLM) which concerns itself with managing descriptions and properties of a product through its development and life.

The cycle

Products are seen to go through five major stages. The first of the stages is the new product development stage. This stage is usually very expensive and results in initially losses as there is no sale revenue derived at this stage. The next stage is market introduction and this stage is also very costly. The product introduced is new to the market and initially sales are low in volume and some monetary losses can result. At this stage there may be little or no competition as this only starts as acceptance of the product by consumers initiates competitive manufacturers to produce similar products.

The growth stage follows where the product sales volume increases. There is an increase in profits and in public awareness. The product will at this stage be facing some competition and prices must be adjusted to maximize market share. At the mature stage the product is well established and marketing costs are lowered as there is little need for advertising. The sales volume will peak at this stage. Competition is high at this stage and there is the need to differentiate your product from the others in some way. This is followed either by the stage of decline or stability.

Cycle management

Products may or may not pass through all these stages. This depends on the management of the cycle. Many products can stay at the mature stages forever. Marketers employ various techniques to achieve this and prevent the process going toward the decline stage. The approach toward the product is altered through the life cycle of the product. Advertising focuses on being informative in the developmental phase, persuasive in the mature and growth stages and reminder based in the decline stage. Other processes that are managed include the promotional budgets, pricing, distribution and product characteristics as innovative means are necessary to the production of a profitable product.