Product Life Cycle Management
All businesses need to provide something that the customer wants. When that something is a physical product (as opposed to services offered) then that product needs to go through a life cycle. Product Life Cycle (or PLC) refers to the length of time that the product is viable for, and can still be sold. This applies to all products but all products have varying life cycles. For example; groceries will have a very short life cycle due to their nature; but a building would have a very long one… PLC also changes varying on market styles, fashions and fads – but all that means is that products can fall in and out of trend and thereby decrease or increase in demand.
The five stages
The PLC comes in five stages. The first stage is Product Development; where the idea to supply x product is put into motion. Raw materials and suppliers are sourced, legislation is negotiated and research is completed. During this first stage a company can expect their costs to rise while their profits are still at zero.
The product will then undergo the Introduction stage, when the product is first introduced to the market. Sales are likely to be slow at this stage because ‘word of mouth’ hasn’t spread yet. Profits are still very unlikely due to all proceeds from sales going towards the deficit made in the first stage.
Next comes arguably the best stage: Growth. As awareness of your product grows you can expect return on investment to kick in a little. As the product’s demand grows so too do your profits, and if it is a good product you will likely cover your initial expenses and then some at this point.
The fourth stage is Maturity. When a product has been on the market for a suitable length of time competitors will release similar products and you will start to experience some competition. Sales will slow down as the initial ripples of excitement over the product fade and you can expect slightly slower but still steady sales.
In the final stage, the product’s life cycle goes into Decline, and sales will taper off or end completely. It is at this stage that manufacturers would usually stop selling and move on, although most firms will have several products for sale at any given time, each with a different life cycle so that something new is always happening.
Software and the product life cycle
At either stage there is opportunity for improvement via the right programs, and there is also the opportunity to monitor your product’s life cycle using the correct software – which becomes more useful the more products you have. Digital systems can speed up your outsourcing needs in the initial stages, and help you keep reliable statistics at all times that your product is live. Digital advertising is becoming more and more popular – with sales expected to outdo TV advertising for the first time ever in 2018 – so take advantage of it and use digital means to boost your sales right up until the point of decline. Try it, and see how much of a difference it makes to your company.