The product lifecycle (PLC) is known to provide an indication of the lifetime of the Combination product means that the line indicates the position of your product or service. In this article I give 4 questions how to use the PLC.
Do I need the product lifecycle?
The model provides a picture of the phase in which a product is at. From earlier analyzes you have concluded that strategic considerations must be made. The PLC line hereby gives a clear indication to the organization.
Which variables do I need?
An average product has a 5 year life cycle. The outlet is the height on the line in the PLC. The life phases are shown on the horizontal axis.
How can I apply the product lifecycle?
In this example, the product life cycle is used in combination with the BCG matrix . Each life cycle phase is combined with the BCG Matrix.
In the introduction phase ( Question Mark ) you notice that few sales are realized. So little profit is made. Competition is low because it is a new product. The next step is the announcement of the product or service.
- A method to increase awareness is a promotional campaign.
In the growth phase (Star) , the product starts to generate money. The product or service is profitable, which increases sales. In most cases, the competition will copy the product or service. Competition in this industry is increasing.
- Product benefits must be emphasized in order to conquer the market;
- Paying back costs is the main goal in this phase.
In the adulthood phase (Cash Cow) , growth rises minimally. In order to maintain and grow the life cycle, a good relationship with cost control is important.
- Offering price reductions is a must to maintain demand;
- Sales promotions are also a must to maintain demand.
In the saturation phase (Cash Cow) there is a slight decrease in the demand for the products. It is advisable to reject the product. In this phase it is decided whether a product or service should be extended.
- The results from the BCG matrix can be used to determine whether there is a growth or a decrease.
In the decline phase (Dog) , the demand for the product or service decreases. So there are alternatives in the market that are better.
- Explore the market with the PESTLE. Remove the opportunities and threats for your products.
What can I get out of it?
The following can be extracted from the image. The products are currently in the introduction phase. The products are designed and are still being produced at this stage. In addition, a lot of attention is paid to recruit potential customers in the growth phase. The product is becoming better known and as a result more will be sold.
In the marketing model environment you can now also generate the PLC yourself.
Ultimately, the product will enter adulthood. In this phase there will be sales from regular customers. In the last phase, the product will no longer be sold by a large group of customers. This will introduce a new product or add a product feature to extend the maturity phase.