Product Life Cycle (PLC)
Today`s business world recognizes the importance of strategy and strategic management. Normally any strategic process has three distinct stages which are analysis, formulation of plans and implementation, a strategy is significantly influenced by environmental change. In this study the focus is formulating strategy and fit this on the Product life cycle (PLC) phases to advance successfully in market competition. Managers need to formulate a marketing strategy that generates a competitive advantage and positions the organization`s products effectively. Formulating strategy contain three steps, but this study is limited to one of the steps and pricing strategy in order to see how these strategies are related and now they cooperate with each other and also how to fit them in the phases of a product life cycle. The product life cycle is an important concept in marketing. Product life cycle is the stages through which a product or its category bypasses. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market. Not all products reach this final stage, some continue to grow and some rise and fall. The product life cycle (PLC) describes the life of a product in the market with respect to business/commercial costs and sales measures. It proceeds through multiple phases, involves many professional disciplines and requires a multitude of skills, tools and processes. This is not to say that product lives cannot be extended - there are many good examples of this - but rather, each product has a 'natural' life through which it is expected to pass However, rapid rate of technological advance is shortening PLCs (Lee et al., 2006). Meanwhile, the interval between these generations becomes shorter as the competition becomes more intensive (Kim et al., 2005). Faced with abbreviated product longevity, predicting the demand for and diffusion of new products is crucial for purposes of investment decision, of marketing, and of policy setting (Lee et al., 2006).
What is Product Life Cycle (PLC)?
Levitt defined a PLC as the life of a product to that of a living organism (Levitt, 1965; Dickson, 1997). The concept of PLC explains the general tendency of products’ development process or a depiction of a product’s sales history from its “birth” or marketing beginning, to its “death,” or withdrawal from the market (Zikmund and d'Amico, 1999). Schnaars (1991) defined the concept of PLC to be a pattern-based approach which tracks trends in product sales histories from their inception to their demise. Sakai et al. (2003) and Chen et al. (2006) mentioned that PLC could describe the possible product policies in different stages of PLC as well as helps the enterprise to compare its product with the former similar product to estimate the performance of the products that would be introduced to the market (Che, 2009). Assael (1993) thought PLC to be a useful tool for suggesting strategies over the life of a brand and in indicating when changes in strategies should take place. It is even more useful for helping marketers develop successful, profitable product strategies as the market for a product changes over time (Solomon and Stuart, 1997). In summary, the concept of PLC has been proven to be successful for more than 40 years, which has impacted the development of marketing strategies significantly. The process wherein a product is introduced to a market, grows in popularity, and is then removed as demand drops gradually to zero. The Product Life Cycle (PLC) is used to map the lifespan of a product. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. PLC describes the stages a product goes through from when it was first thought of until it finally is removed from the market The PLC is a vitally important phenomenon in marketing management which managers...
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