On the PLC

On the PLC

The Product Life Cycle (PLC) has a very interesting charm to it. Like living things, the PLC assumes that products are introduced first. Then they go through phases of growth, maturity, and The Product Life Cycle (PLC) possesses a fascinating and somewhat enchanting quality. It draws an intriguing parallel between the life stages of living organisms and the journey of products in the market. Much like living beings, the PLC framework suggests that products have a life of their own, beginning with their introduction into the market. They then go through phases of growth, maturity, and decline. 

The charm of the PLC lies in its simplicity and its ability to provide a structured narrative that resonates with our understanding of life itself. By framing the market journey of a product as a life cycle, marketers and strategists are equipped with a tool that is both intuitive and powerful, offering insights into the stages that a product may go through and the strategies needed to navigate each phase successfully.

However, it is also one of the most misunderstood tools in marketing and strategic management.

Despite its widespread use, there remains significant confusion about its application and scope. For instance, Turnbull and Meenaghan (1980) assert that “the PLC concept views the process of market introduction from the point of view of the marketing company.” However, this interpretation is fundamentally flawed. As Theodore Levitt elucidated in his seminal 1965 paper, the PLC is a concept that should be understood at the industry level, not merely from the perspective of an individual firm or product.

The distinction between industry-level and firm-level perspectives is crucial. When Levitt introduced the PLC, he aimed to provide a framework that would allow marketers and strategists to understand the broader evolutionary patterns within an industry. However, the simplicity of the PLC concept—often depicted as a smooth curve moving through phases of introduction, growth, maturity, and decline—has led to its misapplication. Many practitioners have attempted to apply the PLC model too narrowly, focusing on individual products or brands rather than considering the dynamics of the entire market or industry.

This widespread misunderstanding has even necessitated clarifications from marketing authorities like Philip Kotler. In his textbooks, Kotler frequently specifies “product (market offering)” to ensure that readers grasp the broader implications of the PLC, rather than viewing it through a limited lens.

The confusion surrounding the PLC concept can be attributed to its inherent simplicity. While the model offers a clear, intuitive framework, it risks oversimplifying the complex, multifaceted nature of market dynamics. Before delving deeper into the nuances of the PLC, it is essential to revisit and clarify what we mean by “product” in this context.

What is a Product?

The term “product” is one that has seamlessly integrated itself into the English lexicon, carrying with it a broad array of meanings and interpretations. Its widespread usage in both everyday conversation and specialized fields like marketing has led to its definition being stretched to encompass various concepts. At its core, however, a product can be simply defined as “an object, system, or service made available for consumer use to meet consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer” (Kotler et al., 2006).

In marketing, products are typically understood to exist on three distinct levels:

  • Core Product: This is the fundamental benefit or solution that the customer is actually purchasing. It addresses the core need or desire that the product fulfills.
  • Actual Product: This represents the tangible, physical product or the service that the customer buys. It includes features like design, brand name, packaging, and quality level.
  • Augmented Product: This includes additional value-added services and benefits that accompany the actual product, such as warranties, customer service, and after-sales support.

(Note: In more recent texts, this model has been expanded to include five levels, but the underlying logic remains consistent.)

The distinction between these levels is crucial because it highlights the layered nature of a product offering. While the core product remains constant, the actual product can manifest in various forms and may be enhanced by augmented features. It is this nuanced understanding that often leads to misinterpretations when applying concepts like the Product Life Cycle (PLC).

But then, do all products follow a similar life cycle?. The answer has to be a resounding ‘NO!’

To illustrate, consider the different levels at which a PLC might be drawn: for an entire product category (such as music), for a specific product (like cassettes), or for a particular brand (such as Sony cassettes). Each of these would exhibit a distinct life cycle curve, reflecting the unique dynamics at play. For instance, when analyzing the RIAA dataset, one might observe a classic bell-shaped curve for nearly every product format.

The emergence of this bell-shaped curve is no accident. It mirrors the natural progression observed in many aspects of life. 

But then, do all products follow a similar life cycle?. The answer has to be a resounding ‘NO!’. Each product’s journey is unique, influenced by factors such as market demand, technological advancements, and competitive dynamics.

Different life cycles

The reality that different products exhibit distinct Product Life Cycle (PLC) curves is well-documented and has been widely acknowledged by scholars and practitioners alike. When exploring contemporary marketing textbooks, such as the 4th European edition of Marketing Management by Kotler et al. (2019), one can observe a variety of PLC models that illustrate the diverse trajectories products may follow.

This image is sourced from page 441 of the 4th European edition of Marketing Management by Kotler et al (2019).

These varying life cycles highlight that not all products experience the same progression through the stages of introduction, growth, maturity, and decline. Some products may follow the classic bell-shaped curve, while others might deviate significantly, taking on entirely different forms. For instance, certain products, such as nylon—a case study famously discussed by Levitt in his 1965 work—may defy the typical pattern by remaining in a prolonged state of growth, seemingly bypassing maturity and decline altogether.

This raises an intriguing question: How is it possible for some products to sustain continuous growth or follow an unconventional life cycle path?

The answer lies in the adaptability and innovation that can extend a product’s life beyond the traditional boundaries of the PLC. Market dynamics, technological advancements, and shifts in consumer preferences all play crucial roles in shaping the life cycle of a product. Moreover, strategic decisions made by marketers—such as finding new uses for the product, entering new markets, or reinventing the product through innovation—can significantly alter the expected trajectory.

Understanding that products can have varied and unique life cycles is essential for marketers. It empowers them to craft strategies that are responsive to the specific needs and circumstances of their products, rather than relying on a one-size-fits-all approach. The flexibility to adapt and evolve is what allows certain products to thrive over extended periods, even as market conditions change.

Closing Remarks

The key insight to grasp is that, unlike naturally occurring organisms, products are not bound by the inevitability of death. With strategic innovation and adaptation, products can endure and thrive in changing market environments. The creative energies of marketers—and students like you—can uncover new opportunities, whether by identifying untapped market segments or devising innovative uses for existing products. This approach can breathe new life into a product, reinvigorating sales and extending its relevance in the marketplace.

It’s important not to view the Product Life Cycle (PLC) as a rigid, unchangeable doctrine. While the PLC is a valuable heuristic tool that helps marketers understand the phases products may go through, it is not a prophecy set in stone. Marketers retain the agency to influence and reshape the trajectory of a product’s life cycle, for better or worse.

Moreover, consider the challenge of defining a life cycle for a product that has not yet reached its end. How do you predict the decline of something still evolving? This is a question worth pondering.

To help visualize these concepts, you will find below a PLC plot that I simulated by creating fake data. The chart encapsulates the main points we discussed in class. Notice that while there may be significant fluctuations within an industry, the overall industry trend often follows the typical introduction-growth-maturity-decline curve. As you analyze PLCs in your future career, it will be crucial to ask at what level the curve is being drawn—whether it’s for a category, a product, or a brand—and to compare these curves across different levels to gain a more comprehensive understanding.

A clear illustration of the broader picture can be found in the RIAA data, particularly in the trajectory of CD sales over time, as shown in the appended graph.