The Product Life Cycle (PLC) – a concept that many companies know about but don’t actually use well in real business decisions. The author says that companies should stop just knowing about it and start using it to gain a competitive advantage.
Most products go through four main stages in their life:
- Market Development
– The product is new and unknown, so companies must create awareness and demand. It’s risky, and many new products fail. - Market Growth
– Demand increases quickly. More customers start buying, and competitors enter the market. Companies now need to make customers prefer their brand, not just try the product. -
Market Maturity
– Sales slow down. The market gets saturated. Competition becomes intense, especially on price, packaging, services, and small differences. Companies focus on keeping their spot in the market. - Market Decline
– Sales fall. Customers lose interest. Too many suppliers lead to overcapacity. Only strong players survive. Companies must cut prices and reduce costs.
Levitt explains that every stage needs different strategies. For example, pricing and marketing tactics in the Growth stage are not the same as in Maturity.
He also says that just launching a product is not enough. Companies need to plan ahead, even before launch, and think about:
⤷ How long the product will stay in each stage.
⤷ How to extend the product's life.
⤷ How to introduce new uses or reach new customers.
This is called “life extension” or “market stretching”. Examples include:
⤷ Jell-O being used in desserts and salads.
⤷ Scotch tape being promoted for gifts and industrial use.
⤷ Nylon used in stockings, tires, and carpets.
Levitt suggests 4 ways to extend a product’s life:
⤷ Get existing customers to use it more often.
⤷ Show them new ways to use it.
⤷ Find new customer groups.
⤷ Discover new uses for the core material.
Planning for this before launch has many benefits:
⤷ Helps companies act proactively, not just react to competitors.
⤷ Ensures better timing of marketing efforts.
⤷ Encourages thinking about the business in broader terms (e.g., not just a dessert company, but a dessert technology company).
He also warns that early decisions affect future stages, so pricing, branding, and sales strategies must be chosen with the full product journey in mind.
Summary
- Product Life Cycle (PLC) has four stages: Development, Growth, Maturity, Decline.
- Each stage needs a different marketing and business strategy.
- Most new products fail during development due to lack of demand or poor planning.
- In Growth, competition increases fast. Companies must differentiate their brand.
- In Maturity, sales slow down. Focus shifts to price, packaging, small improvements.
- In Decline, sales fall. Companies must decide whether to exit or cut costs.
- The product creator suffers the most risk and cost, while copycat brands enter later with less risk.
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Planning before launch helps companies:
- Extend product life.
- Prepare for competition.
- Identify opportunities early.
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Life extension strategies:
- More frequent use by current customers.
- New ways to use the product.
- New customer groups.
- New markets or applications.
- Early planning helps avoid surprises and lets the company lead, not just follow others.
