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Advantages of The Product Life Cycle

The product life cycle is used by companies to understand how a product will perform in the market over time. It provides advantages like easy sales forecasting, defining strategies at each stage, and informing marketing and decision making. However, it also has limitations as market conditions vary and sales can be difficult to predict accurately. Managing a product through its life cycle requires focusing on areas like manufacturing, marketing, financing, development, and information collection at each different stage.

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Munotidaishe Taziwa
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865 views5 pages

Advantages of The Product Life Cycle

The product life cycle is used by companies to understand how a product will perform in the market over time. It provides advantages like easy sales forecasting, defining strategies at each stage, and informing marketing and decision making. However, it also has limitations as market conditions vary and sales can be difficult to predict accurately. Managing a product through its life cycle requires focusing on areas like manufacturing, marketing, financing, development, and information collection at each different stage.

Uploaded by

Munotidaishe Taziwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Advantages of the Product Life Cycle

A product life cycle is extensively used by the organizations to understand and estimate the
performance of a product in the market. The company can benefit in the followings ways
from a product life cycle:

 Easy Sales Forecasting: The product life cycle is an estimation of the sales which the
product will be able to make in its life span.
 Competitive Advantage: Analyzing the life of a product in the market and framing the
strategies accordingly, helps the company to face competition.
 Defined Strategies: If the company is aware of the product’s future performance, the
company can determine and plan the strategies in the long run.
 Decision Making: To make crucial decisions related to the product such as product
development or improvement, product life cycle analysis is essential.
 Marketing Target and Positioning: Product life cycle provides for targeting the right
audience and establishing the brand image of the product.

Disadvantages of the Product Life Cycle


The product life cycle is a mere forecast and depends upon the prospective sales estimate. It
has various other limitations which are as follows:
 Varying Market Conditions: The market conditions vary from place to place, and the
same product life cycle may not be suitable for every market.
 Inapplicable to Every Product: Some services like mobile network and computer
software, keep on frequently updating from time to time. However, it does not mean
that the brand gets obsolete.
 Fluctuation in Sales Data: Variation in the sales data is essential for the product life
cycle. But it is difficult for the company to predict such information to plot the PLC
curve.
 Effect of Other Elements: The analysis of the product life cycle is also affected by the
various elements of the 4 Ps of the marketing mix, including the product itself, price,
place and promotion.
 Delay in Analytics: The product life cycle requires collection and analysis of the sales
data, which is delayed or unavailable at times.

Product Life Cycle Management


The management has to concentrate on various business areas or fields to make the product a
success. Following are the specialized management fields which need to be taken care of
right from the launch of the product to its decline in the market:

Manufacturing: The cost of production of goods and services matter and vary to a great
extent during a product’s life cycle. This cost very high at the development stage whereas it
gradually decreases at the growth and maturity stages.

Marketing: The strategy for marketing the product varies at each stage. When the
introduction stage requires excessive marketing and promotion, unlike the growth stage
where the product requires less publicity and is popular among customers, this strategy
changes entirely at the decline stage.

Financing: The initial capital requirement at the introduction stage of a product is quite high.
Whereas, at the growth and maturity stage, the product self finances itself through sales and
profit earned by it.

Development: At the development stage of a product, the management needs to focus on


research and analysis. It invests maximum time, energy and efforts in the development of a
new product.

Information: The collection and analysis of potential data, including market trends, effective
means of promotion, prospective growth, etc. are necessary for the management.

Conclusion

The product life cycle planning and analysis is an integrated function of all the departments
of the organization. Also, it is an ongoing process which never ends.

Related Terms:
1. Sales Management
2. Global Marketing Vs International Marketing
3. Sales Budget
4. Wheel of Retailing
5. Marketing Vs Selling

Reader Interactions
Comments

1. BETSHEBA KANGWA says

July 22, 2020 at 8:26 am

The product life planning is very perfect for people under marketing.

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