PLC AS A TOOL
The Product Life Cycle (PLC) phenomenon does not operate in a vacuum. It is the marketâ€™s reaction to the product that largely decides when one stage in the life cycle will taper off and the next stage sets in. For example, immediately after product launch, if the consumers are indifferent to the product and are unwilling to try it out, obviously the pioneering stage will get extended. In the maturity stage, the consumersâ€™ apathy to the product may drive a sudden decline. Conversely, in this stage, if consumersâ€™ interest can be strongly aroused and sustained, it can be prolonged. This only means that each stage of the product life cycle is an outcome of market behavior/response.
The duration of each phase will depend upon the product, its newness, its functions and the marketing strategy of the firm. Here, we have to recall the process of innovation diffusion discussed on New Product Decisions. The firmâ€™s success in reaching out to the innovators, early adopters, and early majority and so on will decide the duration of each PLC stage. Innovation diffusion, new product adoption and PLC are closely interrelated concepts.
With appropriate marketing strategies, the firm can exploit this linkage and manipulate the various stages in the cycle to its advantage. And, it is this linkage that makes the PLC concepts a useful tool in the formulation of marketing strategy.
Put differently, the utility of PLC arises out of the following facts:
1. A product has to necessarily pass through certain stages during its life.
2. What happens to it in each stage depends on market behavior.
3. By manipulating market behavior, the life cycle stages of the product can also be manipulated.
Actually the PLC concept can be of help in different ways â€“ in pre-planning the new product launch; in prolonging the profitable life phase of an existing product; in reacting to competition in a planned way; in deciding the long-term investment in products.
PLC Concept helps Marketing Strategy formulation.
v Facilitates pre-planning the product launch.
v Facilitates prolonging the profitable phase.
v Facilitates investment decisions on products.
v Facilitates choice of appropriate entry strategy.
v Facilitates choice of the right time to exit.
v Provides useful clues for managing customers.