1、The explanationand application of Product Life Cycle一、 Introduction（一）Market backgroundIt is a generally accepted statement that 90% of the products we use today did not exist in their current form five years ago. Similarly ， 90% of the products we will be using five years from now do not currently

2、exist. Whether this statement is entirely accurate or not， we can allidentify products that have changed from their original form and/or content. And ， with todays rapid changes in technology ， a typical expected product life is from design to obsolescence.This idea is demonstrated by the Product Li

3、fe Cycle concept ， which shows the path a typical new product takes from its inception to its discontinuation. Itsassociated with changes in the marketing situation ， thus impacting the marketing strategy & the marketing mix as well. Understanding the Product Life Cycle（ PLC） is ofcritical importanc

4、e to a firm launching a new product. It helps a firm to manage the risk of launching a new product more effectively ， whilst simultaneously maximising the sales and profits that could be achieved throughout the products life cycle.（二）The aim of the researchThis article identifies the different steps

5、 of product lifecycle and analyzes different product that they grow in the market ， tries to used the product lifecycle Model （ picture 1 ） to analyse the product.二、 Main BodyAlmost every product will undergo some sort of modification during its lifetime. It is represented by a curve that can be div

6、ided into four distinct phases：introduction ， growth ， maturity ， and decline （ Hedden， C 1997， p46 ） .（一） Introduction StageThis is a stage of the product will be developed. The prototype will be tested & market research carried out before it is launched onto the market. Recent product developments

7、 include the likes of the iPod by Apple and the Serene by Bang and Olufsen.During the product development and introduction stage ， the sales are zero and profits are negative becausecustomers may not be aware of its benefits or advantages over current offerings. Informative promotion is needed to te

8、ll potential customers about the new product concept. In addition ， depending on the nature of the product ， the firm many need to invest in building inventories or acquiring fixed assets such as plant and machinery. Whilst this stage in the process can take a long time and consume considerable reso

9、urces ， firms must not be tempted to try to obtain early profitability at the expense of long-term product viability. For example， introducing a new product at a low price may encourage a lot of consumers to make an immediate purchase ， but the firm not only sacrifices long-term sales because too ma

10、ny people have bought the product early on but also may considerably reduce its margins， making itmore difficult and time consuming before the product first becomes profitable and hits its break-even level.However， everything has two sides ， the new product on to the market can be very profitable in

11、 the first stage ， the fast adoption of Nutrasweet low-calorie sweetener in the U.S. market is a good example - it offered a real comparative advantage ， namely fewer calories than sugar without the aftertaste of artificial sweeteners. Plus ， itwas easy to communicate the benefits - Nutrasweet worke

12、d well in many products ， such as diet soft drinks ， that were already a big part of consumerslifestyles. However ， inless-developed countries， where malnutrition ， notdieting ， is the problem ， Nutrasweet does not offer a comparative advantage.（二） Growth StageIn the growth stage sales start to grow

13、 rapidly. Buyers will start to adopt the product as they receive positive word-of-mouth recommendations from people they trust ， profits start to be made as more and more customers buy the product ， as the sales volume increases ， the manufacturing and promotional spend per unit decreases ， which al

14、so helps to increase profitability.However， due to the beneficial ，competitors see the opportunity and enter the market. Some just copy the most successful product， or try to improveit to compete better. Others try to refine their offerings to do a better job of appealing to some target markets. The

15、 new entries result in much product variety. The Internet，more specifically the World Wide Web component of the Internet ， is probably in the growth phase of its life cycle. The advantages of the Internet have resulted in its very rapid acceptance in consumer and business markets. Furthermore ， iPod

16、 ( portable digital music player ) is also in the growth stage of its life cycle.Nonetheless ， if the firm wants this growth phase to continue rapidly without petering out， it must invest inadding new product features or improving the quality of the product. This may not only attract existing custom

17、ers to upgrade their current product purchase but it may also attract different customer demographics that would ordinarily not have been drawn to the products features and functionality. Alternatively， improvements incustomer support or the creation of easy-to-use functionality can help the firm ac

18、quire more risk-averse consumers who require greater product support. Over time ， the company may choose to reduce prices considerably in an attempt to attract more customers ， or bundle the product with other offerings that may be approaching the end of their growth stage. Nonetheless， it is typica

19、lly just amatter of time before the products growth starts to waiver.(三)Maturity StageMaturity stage is a key point for a firm because it marks the turning point in the products success.Typically ， the growth in sales decreases quite significantly and manufacturers over-capacity results in a reactio

20、n by the firm and its competitors to slash prices. Thus， less efficient firms cant compete with the increasing pressure on prices and drop out of the market.Whilst still positive ， starts a downward slide. Companies such as HERSHEYS have managed to prolong this stage considerably through intelligenc

21、e branding ， promoting the fact that their chocolate bars are unchanged since 1899. Indeed ， whilst Coca-Cola manages to increase global sales through entry into additional markets， many of its coreproducts have remained the same over significant periods ； it has just been their branding that has ch

22、anged.Overall ， the maturity phase of the life cycle is thelongest phase for most products. Sales grow at a decreasing rate and then stabilise. Such as the markets for most cars ， boats ， television sets ， and most household appliances are in market maturity. This stage may continue for many years -

23、 until a new product idea comes along that makes the old product concept obsolete - even though individual brands or models come and go.（四）Decline StageIn the Decline stage， new products replace the old.Price competition from dying products becomes more vigorous ， but firms with strong brands may ma

24、ke profits until the end because they successfully differentiated their products. They may also keep some sales by appealing to the most loyal customers or those who are slow to try new ideas. Costs ， because competition is still intense ， continue to rise.三、 ConclusionTo summary， almost every produ

25、ct will undergo some sort of modification during its lifetime which will be cycled by the introduction ， growth ， maturity and decline. However， very few products follow the prescription cycles. Say about 80% of all U.S. households own microwave ovens，which would lead some to conclude that microwave

26、 ovens are at the market maturity stage. In many countries ， however ， they are still early in the growth stage - in Switzerland ； for example， microwave ovens had a household penetration level of less than 15% in 1994. U.S. microwave manufacturers can extend their product life cycles by expanding t

27、heir distribution to off-shore markets.Therefore ， re-invest themselves at the end of their growthstage or before they witness the negative side of the maturity stage. For example ， companies such as Levis have managed to re-invent their jeans brand through the use of different fabrics and cuts that

28、 have given their product a new ， youthful look. Other example， the needs relatedto storing and preparing foods. Wax paper sales in the U.S. started to decline when Dow introduced Saran Wrap. In the early 1970s ， sales of Saran Wrap， and similar products ， declined sharply when plastic storage bags

29、became popular. However， sales increased by the end of the decade. The product didnt change ， but consumer needs did - as microwave ovens gained in popularity ， consumers found that plastic wraps worked very well in microwave cooking.In addition to those variations to the common PLC， theconcept can

30、also be used to describe into fads ， fashion ， and style. Fads are fashions that are introduced and adopted very quickly ， but just as quickly can fall. They typically have a limited following， but are nonethelessadopted with real zeal ， such as the hula-hoop. Fashions grow more slowly but still qui

31、te quickly before eventually witnessing a decline. However， in some cases these become a style ； that is ， they come back into fashion. For example ， Beanies and Yo-Yos were in fashion during the 1950s and 1960s respectively before largely dropping off the radar until the 1990s when both products witnessed a revival四、 RecommendationThe Product Lifecycle model describes how products go through the four phases of Introduction ， Growth ， Maturity and Decline after they are launched. Each phase requires a different mix of marketing activities to maximize the life