Theodore Levitt and many subsequent researchers have presented Product Life Cycle (PLC) as a typical sales curve over time, from introduction to final withdrawal, divided into four or five stages. This might have been, to some extent, useful to the managers for strategic decisions during pre-liberalization era when markets and marketing thoughts were not concerned with fierce competition, sufficient direct and indirect substitutes, rapid growth of technology, regular change of economy, and consumer behavior. In this paper, PLC concept is critically examined and a model is derived which needs to be considered by companies for New Product Development (NPD) in an emerging economy.
Product life cycle is considered to be one of the most invasive concepts in the world of marketing (Capon, 1978). Theodore Levitt, the father of Product Life Cycle (PLC), and many subsequent researchers have presented product life cycle as a typical sales curve over time, from introduction to final withdrawal, divided into four or five stages (Levitt, 1965; Buzzel, 1966; Cox, 1967). This might have been important to managers for many strategic decisions during pre-liberalization era when markets and marketing thoughts were not conerned with fierce competition, sufficient direct and indirect substitutes, rapid growth of technology, regular change of economy and consumer behavior, but its utility with respect to being just a sales and profit curve is obsolete today. A product can face hard time during its birth and death due to poor advertising, inefficiency of distributional channel and so on and so forth which may not (and often not) be the signal of decline. We will critically examine PLC concept here below and see how this concept can be used with certain renovation for new product development(NPD) in this new economy.
Product Life Cycle is the life story of most successful products of their passing through certain recognizable stages namely introduction, growth, maturity and decline (Levitt, 1964; Capon, 1978). According to Levitt, introduction stage is when the product first comes to the market before a proven demand. The amount of time that development stage takes depends on the product's complexity, its degree of newness, its fit into the consumer's needs and the presence of competitive substitutes. Levitt had also suggested that many companies, instead of aspiring to be first, let others to pioneer, and then act based on the response of the market (Used Apple Policy). In Growth Stage sales take off and the profit increases. Some products follow market skimming and others face competitors due to high profit. There is a shift from product adoption to brand preference. Maturity Stage comes, according to many researchers, after the growth stage when the product faces market saturation. In maturity stage it lives with a number of direct and indirect competitors. Differentiation of the products and services is required to keep the firms away from fierce competition. More advertising is required to remain in the minds of the existing users and creating niche. Decline stage is the last stage of the PLC. Sales decline at this stage due to new substitutes, competition and environment. The consumer reaches into saturation. Products are killed or special measures like life extension or market stretching are to be taken by advance planning. |
