For g et the Pr oduct Life Cycle Concept! - Har var d Business Review Harvard Bus ines s Publis hing: For Educators | For Corporate Buyers | Vis it Harvard Bus ines s School
Forget the Product Life Cycle Concept!
by Narim an K. Dhalla and Sonia Yus peh
Suppos e a brand is ac c eptable to c ons umers but has a few bad y ears bec aus e of other fac tors —for ins tanc e, poor advertis ing, delis ting by a major c hain, or entry of a “me-too” c ompetitive produc t bac k ed by mas s ive s ampling. Ins tead of
think ing in terms of c orrec tive meas ures , management begins to feel that its brand has entered a dec lining s tage. It therefore withdraws funds from the promotion budget to financ e R&D on new items . The nex t y ear the brand does even wors e, panic inc reas es , and new produc ts are has tily launc hed without proper tes ting. Not s urpris ingly , mos t of the new produc ts fail. Thus management has talk ed its elf into a dec line by rely ing s olely on the PLC c onc ept.
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The annals of bus ines s are full of c as es of onc e s trong and pros perous brands that have died—if not with a bang, at leas t with a whimper—bec aus e top management wore PLC blinders . A good ex ample is the c as e of Ipana. This toothpas te was mark eted by a leading pac k aged-goods c ompany until 1968, when it was abandoned in favor of new brands . In early 1969, two Minnes ota bus ines s men pic k ed up the Ipana name, c onc oc ted a new formula, but left the pac k age unc hanged. W ith hardly any promotion, the s uppos edly petrified demand for Ipana turned into $250,000 of s ales in the firs t s even months of operation. In 1973, a s urvey c onduc ted by the Target Group Index s howed that, des pite poor dis tribution, the toothpas te was s till being us ed by 1,520,000 adults . Cons idering the limited res ourc es of the owners , the brand would have been in an even s tronger pos ition had it been retained by its original parent c ompany and been given appropriate mark eting s upport.
Plan n in g with o u t PLC
In a s lightly different vein, there are s everal c as es of c ompanies that have ignored the PLC c onc ept
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and ac hieved great s uc c es s through imaginative mark eting s trategies . The c las s ic ex ample of the 1940s and 1950s is DuPont’s ny lon. This produc t, whos e original us es were primarily military (parac hutes , rope, and s o on), would have gradually faded into oblivion had the c ompany believed that the dec lining s ales c urve s ignaled death. Ins tead, management boldly dec ided to enter the volatile c ons umer tex tile mark et. W omen were firs t induc ed to s witc h from s ilk to ny lon s toc k ings . The mark et was later ex panded by c onvinc ing teenagers and s ubteens to s tart wearing hos iery . Sales grew even further when the c ompany introduc ed tinted and patterned hos iery , thereby c onverting hos iery from a neutral ac c es s ory to a c entral element of fas hion. Here are other brands whos e produc tive lives have been s tretc hed many dec ades by s ound planning. Lis terine Antis eptic has s uc c eeded in retaining its lion’s s hare of the mouthwas h mark et des pite heavy c ompetitive pres s ures and the introduc tion of s trongly s upported new brands . Marlboro is fas t edging up to top plac e in the highly s egmented filter-c igarette mark et by foc us ing
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For g et the Pr...