product life cycle theory
Some products are tied to specific business cycles or have seasonal factors that impact growth. The theory of a product life cycle was first introduced in the 1950s to explain the expected life cycle of a typical product from design to obsolescence. (A) New product Not all products follow a smooth and predictable growth path. The traditional product life cycle theory does come with limitations. In addition, a rise or fall in sales may not signify a change in the life cycle stage. The cycle of life for living things can be seen in at least four basic, rough stages: birth, growth, maturity, and eventual decline ending in death. The product life cycle is an excellent tool which can be used by Business managers, strategists and marketing managers to come up with product strategies.Such product strategies look at the various stages the product is in the life cycle and then come up with the appropriate strategies.. Product Life Cycle is defined as, âthe sequence through which every product goes through from introduction to removal or ultimate downfall.â The theory, originating in the field of marketing, stated that a Product life cycle has three distinct stages: New product, A maturing product, and; Standardized product. The life cycle is a fact of existence for every product. Product life cycle theory uses an analogy between the creation and establishment of a product for sale and a simplified view of organic life cycles. The product life cycle can be a useful tool in planning for the life of the product, but it has a number of limitations. The product life cycle is a pattern of sales and profits over time for a product (Ivory dishwashing liquid) or a product category (liquid detergents). The life-cycle hypothesis (LCH) is an economic theory that describes the spending and saving habits of people over the course of a lifetime. It can be challenging for a business to determine a productâs stage in the life cycle. It is similar to the human life cycle. The product life cycle is the course of the life of a product from when the product is in development to after it has been removed from the market. The concept that studies the life span of product in relation to the demand is popularly known as product life cycle. Writing in Marketing Tools, Carole Hedden observed that the cycle is represented by a curve that can be divided into four distinct phases: introduction, growth, maturity, and decline. Product Life Cycle Theory. The product life cycle concept derives from the fact that a productâs sales volume and sales revenue follow a typical pattern of five-phase cycle. As the product moves through the stages of the life cycle, the firm must keep revising the marketing mix to stay competitive and meet the needs of target customers. The concept PLC is important in marketing theory and practice. It is interesting to note that we can study the PLC only when product completes its entire life. I initially recommend you to read the article on Product life cycle and strategies. The product life-cycle theory is an economic theory that was developed by Raymond Vernon in response to the failure of theHeckscher-Ohlin model to explain the observed pattern of international trade. The product life cycle stages are 4 clearly defined phases, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. A life cycle is generally a blend of various stages that takes a product from its maturity or introduction to its final stage, which is withdrawal or demise. We use âPLCâ as an abbreviation of Product Life Cycle. Every aspect of the world revolves around a cyclic process known as the life cycle. The â¦ Stages include introduction, growth, maturity and decline and are explained in detail here.
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- product life cycle theory
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