Product Life cycle usually operates at three levels:
1. The product level
2. The product sub-category level
3. The brand level
While studying the concept of Product Life Cycle, it is essential to understand what the term product signifies/. Let us explain through an illustration. Taking the computer business, computer as a product category is in the growth stage in its life cycle. The product category involves all configurations of computers – super computers, mainframes, micro/mini and personal computers. Personal computer is a product sub category within computers. This sub category is evolving in a particular pattern within the overall category of computers. Within the sub category of PCs, HP is one brand, Wipro is another and Dell is a third. At the brand level, HP, Wipro and Dell are evolving on their own paths. Thus, the product category of computers has a life cycle of its own, the product sub category of PCs has a life cycle of its own and the Wipro brand of personal computer has a life cycle of its own. In other words, when Wipro attempts to project the life cycle of its PC, it cannot make a realistic analysis unless it studies the life cycle of the product sub category, personal computers, as a whole. Wipro life cycle at the brand level cannot evolve totally independent of the other brands of PCs in the market. The strategies put forward by the competing brands and the reaction of the market to those strategies will certainly impact Wipro.
To cite another example: When scissors was the only brand of cigarette available, the life cycle of the brand, Scissors and life cycle of the product category cigarettes were one and the same. But when Panama entered, the situation changed. The product category of cigarettes now had a life cycle and Scissors had a life cycle of its own within the product category. In the earlier days, the product category, cigarettes did not have any product subcategory. Today, plains and filters can be cited as product sub categories within the product category, cigarettes.
So, when the life cycle of brand is assessed, it is essential to study the life cycle of the product category and that of the product sub category as well. Usually, the product subcategory is of greater relevance than the basic product category. In example of computers, wile studying the projected life cycle of Wipro or HP, the life cycle of the product subcategory of PCs is more relevant than that of the main product category of computers. However, an idea of the likely life cycle of the main product category of computers is helpful in understanding the course the PC sub category may take.
The relevant point is that the life cycle of a brand cannot be projected and studied independent of the product sub-category/product category to which it belongs. Life cycle studies quite often go wrong mainly because companies try to plot a life cycle for their brand without trying to foresee and evaluate what is likely to happen to the cycle of the product category and sub category in which their brand falls. Even when a brand enjoys a predominantly high market share, it cannot ignore the life cycle of the product category. When the life cycle at the brand level alone is investigated without reference to the life cycle at the product subcategory and product levels, the exercise fails to take into account certain important market factors for example, competitors entry and exit, the resources brought on by the competitors, the strategies they implement and the impact of these elements on the market potential are ignored. So, to get a meaningful picture of the path the brand is taking, its life cycle has to be studied in the context of the life cycle of the product sub-category and product category.