how markets change, and how they react to your own products and services
is a vital part of management
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Product Life Cycles - developing your product strategy
Understanding how markets change, and how they react to your own products and services is a vital part of management and marketing strategy. If you understand the Product Life Cycle, you will be ahead of many of your competitors!
If there is one thing that is certain in this life, that is 'Change'. Wherever we look, we see aspects of our life changing. This is clearly seen on the Internet. We see design, technologies, markets - and web sites - evolve, become the current fashion and then fade away.
This is a very general concept that applies to all products and services. The 'Product Life Cycle' is a description of what happens to anything that we produce and sell. It applies to all businesses, large and small. Understanding it and taking appropriate action is essential if you are to maximise the sales and profits of your business.
As the chart
below shows, products (and by this word, we also mean 'services') go through
a cycle which can be described in 4 stages:
Introducing new products
If your business has a number of products, it is likely that they will each be at different stages of the product life cycle. If you are to avoid a decline in overall sales and profits, the timing of introduction of new products is crucial. If you are simply to maintain a plateau in sales, the pattern of new product introduction will look something like the chart below.
OK, so this looks fine in theory, but what about the practical implications? First, never expect everything to work out as smoothly as in the text books. But don't reject the theories because of this. Understanding the theories will help you to develop your business more effectively - and you can look around at examples in the wider world to see how these theories have been put into practice.
auto industry, for example. Existing models frequently have their life
extended by some subtle reshaping of their body work. Some models which
were around for a long time, such as the Ford Escort, ended their life
looking nothing like the model when it was first introduced. Manufacturers
add all sorts of enhancements during the life of a model, to give wider
choice, and sometimes, the appearance of the introduction of a new model.
'Special Edition' models can appeal to new, sometimes niche markets. But
auto manufacturers also plan well into the future so that they can introduce
new models to take over as the older models start to mature and go into
Look at what your competitors are doing. Look at what your customers are doing - and talk to them about their future needs.
The keys to effective product development are information and planning ahead. Neglect them at your peril!