What is a Product Life cycle
Filed Under Blog
Most products have a defined life cycle – consider the humble VHS video recorder or the 3 1/2 inch floppy disk drive – they were introduced into the market, became mass produced, saw huge growth as a global product were overtaken by technological change and saw their market retract and were withdrawn from the market.
Most products don’t have infinite life spans. The Product life cycle model is the concept that all products and services, left in their original state, have a life that goes though numerous stages – products are born, they mature, they grow old and they die!
The product life cycle stages are
• Introduction
• Growth
• Maturity
• Decline
• Withdrawal
The primary reason for the stages of the product lifecycle is the range of influencing factors – for example consider the impact of the following on a given part:
• Introduction of new technology
• Environmental factors
• Consumer factors / demand
• Obsolescence
• Governmental factors
The example of the VHS recorder earlier is a prime example – new technology was introduced (DVD and Blu-Ray) that impacted the position in the market – new entrants become more widespread, captured market share – which resulted in lower sales.
Charting the Product Lifecycle – The Gopertz Curve
The Product Lifecyle is often seen as a graph, sometimes called a Gopertz curve. This plots the sales through the various stages of development
Example Product Lifecycle chart
The product life cycle
Life cycles are not uniform – they will vary from product to product, industry to industry and commodity to commodity – there are a number of factors that might determine the particular shape of the life cycle from development time of the product – through to customer and lifespan of the product i.e. fad products or fashion products will have a different shape to say an automobile.
Product life cycles are an important factor to consider in developing supply chain strategies as they can provide an insight into the movement of price and availability and ensure that your strategy is representative of the current situation of the parts.