A CRITICAL ASSESSMENT OF PRODUCT LIFE CYCLE
A factory could commit mistakes which may affect the profits. Some of these mistakes are:
1. Too much of emphasis on new product development as against continuing the revitalization process of existing brands. More than 95% of new products have failed. Hence, pursuing the path of new product development at the cost of building current brands can be a costly and risky affair. Besides, all new products are going to have shorter lives as competitors catch and imitate the pioneer firm. Existing brands and products may still have several unexplored uses and user groups. Factory that blindly follow the PLC concept may find themselves in a strategic trap.
2. Arising out of the above and an obsession for PLC, may lead a factory to kill its product or brand in the belief that it has reached the decline phase. Stagnation in sales or negative growth rates in sales may lead management to belief so. What is important is to look at the background or backdrop of the product, i.e. the market and explore new uses and users for the product. But most firms ignore this aspects and hence get trapped in their own self- fulfilling prophecies.
But Levitt believes that PLC is a planning tool and not just a descriptive tool. To view the concept of PLC as a fixed pattern for all product types or brands is an error in marketing thinking. It should be seen as a trend of sales over time, that suggests different opportunities at different phases of a productâ€™s existence. The goal of the marketer should be to alter the shape and duration of the life cycle curve by
(a) Promoting more frequent usage of the product among existing customers.
(b) Developing more uses or varied usage of the product among current users.
(c) Creating new users for the product by expanding the market; and
(d) Finding new uses for the product.
Defending the strategy of new product development or extension strategy, Levitt believes that the planning for extension should begin at the pre launch stage itself. For, such planning can be useful in three ways:
(a) It generates a proactive rather than a reactive product policy.
(b) It lays out a long-term plan designed to infuse new life into the product at the right time, with the right degree of care and with the right amount of effort.
(c) Extending or market stretching can help a firm take a wider view of the nature of product it is dealing with and in turn help fight myopia.
Thus, PLC is indeed an important planning tool and firms need to use it. PLC should be seen as providing opportunities to a firm. To do so, it is important for the marketer to examine his or her brandâ€™s fit with the industryâ€™s product life cycle. It is not necessary that the brand be in the same phase of its life cycle as the industryâ€™s product.