Question

Select two separate products as an example of each of the stages of the Product Life Cycle concept.

Provide evidence to support your position.

Identify the marketing characteristics that are present for that particular life cycle stage with the product you selected.

Answer 1

There are basically 4 stages in a product’s lifecycle: introduction, growth, maturity and decline. It is possible for the supply chain model and features to change its approach during the lifecycle of the product. This change can be attributed to the changing demand pattern of consumers, change in external factors affecting business, etc. When a product is newly launched, it opts for the pull approach of supply chain, as there is no dedicated customer base of the company. When this customer base has been developed, the company may change its approach from pull to push supply chain management.

For example: A new automobile company is entering the market. So to create its customer base, it will opt for pull system and provide various benefits and added features to the consumers. The car will also be priced substantially lower. However, when the consumer base has been developed for the company, the automobile company opts for a facelift of its product offering and prices it quite higher. The dedicated customer base will opt to pull the product and thus increase its sales.

So, it is essential for the company to consider the product lifecycle before finalizing its design. Let’s consider another example:

In my views, credit cards are now witnessing the product maturity stage where they are trying to maximize the business profits by defending market share or through poaching system from competitor. The credit card companies try to defy competition by offering competitive interest rates and a basket of benefits. Though there is extensive product availability in this market space, the companies do try to strive hard to offer stiff competition and retain their shelf space.

In the next 4-5 years, the credit card companies will try hard to maintain its position in the maturity stage. They will be on the verge of entering the decline stage. With the arrival and growing popularity of the digital payment options like Lazypay, Paytm, etc. the credit card companies will face a tough time to maintain its market hold. They need to try to maintain their price level at a competitive rate so as to claim its market hold. Customers will be offered with various paying benefits apart from the regular benefits program. The credit card companies will try to hold on their customers through various loyalty programs. So the product and service design is developed in a way to attract the consumers and maintain a hold on them.

Once the credit card companies enter the decline stage, the prices of the product would stabilize at a very low level. Companies will try and get rid of the unpopular products and will try to maintain focus and market hold with the most popular products. So, again when the product or service enters the decline stage, the product design needs to be altered to facilitate the focus of the product or the service.