Understanding and extending the PLC stages allows a company to fully exploit market opportunities, and defend or establish a competitive advantage through a lasting market presence. The main business reason for extending the PLC is to gain more sales through longer presence in the marketplace. The main marketing reason is since not all consumers are alike; certain consumer types will adopt a product at different stages of the product life cycle. By extending each stage of the PLC there is a better chance of exposure to the relevant consumer group. Extending the PLC should not be confused with extending the life of the product, which applies to enhanced durability, reliability or technical quality.
Strategies for Extending the PLC
Strategies for Extending the PLC
The nature and type of applicable strategies to extend the PLC will vary with each stage, and the level of variation depends on the product type, market conditions, consumer audience and projected PLC timeline. It is hard to predict a transition from one PLC stage to another (because of measurement lags) and proactively react to the change with targeted action. However, through proper marketing mix design and contingency planning, it is possible to apply various product planning and product marketing strategies at the beginning of a particular stage when it
arrives. The underlying approach with any of the strategies listed below is Targeted Improvement. [ii]
Product Planning Strategies for Extending the PLC
Product Diversification - Creating different product variants.
Re-Positioning - Changing the product’s perceived values and intent in the mind of the
another strong brand.
Re-Packaging - Literally placing the product in a new package as to revive its appeal.
arrives. The underlying approach with any of the strategies listed below is Targeted Improvement. [ii]
Product Planning Strategies for Extending the PLC
Product Diversification - Creating different product variants.
Microsoft's family of Windows 9.x operating systems allowed the software giant to continuously extend the life cycle of this desktop computer operating system. Windows 95, Windows 98, Windows 98SE, Windows ME, Windows XP are among the better-known variants. Coca-Cola's vanilla flavored drink is an example and a variant to the venerable Classic Coca-Cola drink.
New Product Uses - Applying the core product to different uses. Apple Computer has been very innovative and successful by finding additional uses for its Macintosh computer, such as desktop publishing and strong graphics/animation capabilities. Apple's Digital Hub concept extends the Macintosh's functionality even further to serve as a center for managing multimedia files from cameras, DV recorders, scanners, and MP3 devices. [iii] On the retail side, in the world of “Consumer Packaged Goods” (CPG), Arm & Hammer had devised over several decades a multitude of deodorizing uses for their core product, baking soda.
Changing Product Layers - Altering the product features and creating different
product families. Hewlett-Packard's InkJet and LaserJet printers are examples of product families that share the same technological core. In addition are Jell-O's product families of puddings, colored gelatins, and snacks which are all based on raw gelatin.
Product Marketing Strategies for Extending the PLC
product families. Hewlett-Packard's InkJet and LaserJet printers are examples of product families that share the same technological core. In addition are Jell-O's product families of puddings, colored gelatins, and snacks which are all based on raw gelatin.
Product Marketing Strategies for Extending the PLC
Re-Positioning - Changing the product’s perceived values and intent in the mind of the
consumer. Microsoft's Windows NT was designed as a multi-tasking, multi-threaded,
multi-functional desktop operating system. It was based on work done by Microsoft for IBM's OS/2 and in terms of its feature set resembled Unix more than it did Novell's NetWare. NetWare, a Network Operating System (NOS) and Novell's flagship product dominated the File&Print server market in the early 90's to the tune of 75% market share. Through massive and prolonged positioning efforts, Microsoft was able to persuade corporate IT departments
that Windows NT could be more than just a powerful desktop OS, and could replace NetWare as the departmental File&Print server. Novell tried unsuccessfully to shield NetWare from Windows NT by attempting to position UnixWare (Novell's Unix based OS) against Windows NT. [iv]
Co-Branding - Enhancing (or diluting) the product's brand equity by association withmulti-functional desktop operating system. It was based on work done by Microsoft for IBM's OS/2 and in terms of its feature set resembled Unix more than it did Novell's NetWare. NetWare, a Network Operating System (NOS) and Novell's flagship product dominated the File&Print server market in the early 90's to the tune of 75% market share. Through massive and prolonged positioning efforts, Microsoft was able to persuade corporate IT departments
that Windows NT could be more than just a powerful desktop OS, and could replace NetWare as the departmental File&Print server. Novell tried unsuccessfully to shield NetWare from Windows NT by attempting to position UnixWare (Novell's Unix based OS) against Windows NT. [iv]
another strong brand.
In an attempt to boost sales, IBM announced in 2001 a joint effort with J.D. Edwards & Company to market a specialized IBM eServer called the IBM eServer for J.D. Edwards, optimized to run J.D. Edwards' collaborative commerce software for small to medium size businesses. These types of cobranding initiatives are nearly always an attempt to capitalize on synergy between brands and products.
Re-Packaging - Literally placing the product in a new package as to revive its appeal.
This is common practice in retail markets with the introduction of new labels, different container sizes and different container types, such as Colgate's toothpaste in a tube or pump dispenser. In the computer software world, virtual repackaging is done through the introduction of a new visual GUI (Graphical User Interface) while application functionality remains relatively
unchanged.
unchanged.
Re-Branding - A drastic and costly measure used to disassociate the brand from the previous values with which the brand has been associated. The key concern with such a move is maintaining existing market share. For example, in 2000, IBM re-branded its eCommerce software application,Net.Commerce to WebSphere Commerce. It also re-branded its line of
servers as eServer (formerly Netfinity). This was an attempt by IBM to make a fresh entry and position itself as a competitor in the world of Unix and Intel based servers dominated by Sun Microsystems and Dell Computers. Sometimes companies re-brand themselves in an effort to build new reputation and brand equity - Datsun/Nissan vehicles, Borland/Inprise software products, and GTE/Verizon telecomm services.
Increasing Frequency of Use - Encouraging consumers to break away from traditional
molds of product usage. Chivas Regal was always considered a fine Scotch whisky to be consumed on special occasions such as weddings, or given as a gift. Through a worldwide advertising campaign, Chivas was able to increase consumption by delivering a consistent message about the brand's broader appeal.
New Markets and Segments - This strategy is an attempt to penetrate non-traditional
markets or consumer segments. Companies are able through exploratory research to discover the potential of geographically remote markets (Asia, Africa, and former Soviet Bloc) or new
consumer segments (seniors, minorities, and women). During 2001, Subaru specifically targeted women as a new automotive consumer segment, realizing their strong potential as first-owner buyers.
Pricing and Special Offers - Pricing is a positioning tool and a way to influence sales through the use of various price, payment schemes and models. Price manipulation can take place at all stages of the PLC, including the “Introduction” phase. For example, only six months after its launch in November 2001, Microsoft reduced the price of the xBox game console in North-America by about 30%.
Strategy Application within the PLC Model
Planning which product planning and product marketing strategies to apply, and when, should be part of any long-term approach. Since there are so many diverse products, markets and companies, it is difficult to provide a definitive, single methodology for strategy selection and application. However, some general guidelines can be followed to help ensure marketing mix effectiveness in promoting a PLC stage extension. Once a decision to extend a PLC stage has been made, the following elements must be factored into the planning:
Conclusion
servers as eServer (formerly Netfinity). This was an attempt by IBM to make a fresh entry and position itself as a competitor in the world of Unix and Intel based servers dominated by Sun Microsystems and Dell Computers. Sometimes companies re-brand themselves in an effort to build new reputation and brand equity - Datsun/Nissan vehicles, Borland/Inprise software products, and GTE/Verizon telecomm services.
Increasing Frequency of Use - Encouraging consumers to break away from traditional
molds of product usage. Chivas Regal was always considered a fine Scotch whisky to be consumed on special occasions such as weddings, or given as a gift. Through a worldwide advertising campaign, Chivas was able to increase consumption by delivering a consistent message about the brand's broader appeal.
New Markets and Segments - This strategy is an attempt to penetrate non-traditional
markets or consumer segments. Companies are able through exploratory research to discover the potential of geographically remote markets (Asia, Africa, and former Soviet Bloc) or new
consumer segments (seniors, minorities, and women). During 2001, Subaru specifically targeted women as a new automotive consumer segment, realizing their strong potential as first-owner buyers.
Pricing and Special Offers - Pricing is a positioning tool and a way to influence sales through the use of various price, payment schemes and models. Price manipulation can take place at all stages of the PLC, including the “Introduction” phase. For example, only six months after its launch in November 2001, Microsoft reduced the price of the xBox game console in North-America by about 30%.
Strategy Application within the PLC Model
Planning which product planning and product marketing strategies to apply, and when, should be part of any long-term approach. Since there are so many diverse products, markets and companies, it is difficult to provide a definitive, single methodology for strategy selection and application. However, some general guidelines can be followed to help ensure marketing mix effectiveness in promoting a PLC stage extension. Once a decision to extend a PLC stage has been made, the following elements must be factored into the planning:
- The company's product line’s business strategy - leader, follower, innovator.
- The company's marketing policies - soft or hard product launches, traditional choice of media vehicles, pricing policies, sales channels selection, etc.
- External constraints - government regulations, distribution networks, cultural
barriers, politics, tariffs and taxes, etc.
Conclusion
Keeping a product alive for decades is a sign of successful PLC extensions, and brand/product combinations such as Heinz Ketchup, Hershey Chocolate and Gillette's Safety Razor are clear indicators of such extensions. Through consistent PLC management, a company will be able to improve products and become a marketplace leader. The role of the product marketing department is to understand the Product Life Cycle theory and identify the critical PLC stages.
This will aid the planning and execution of an effective marketing mix, designed to support business (revenue, profit) and marketing (market share, loyalty, growth) objectives.
The “PLC Model” can and has been effectively used by business managers to support decision-making at every stage of a product's life cycle. Although the “PLC Model” itself is subject to many interpretations with some advocates theorizing five or even six stages, it will always remain fairly flexible and adaptive to many product categories.
The “PLC Model” is yet another tool managers have when dealing with dynamic
and complex situations that abound in the world of proactive product planning
and product marketing.
This will aid the planning and execution of an effective marketing mix, designed to support business (revenue, profit) and marketing (market share, loyalty, growth) objectives.
The “PLC Model” can and has been effectively used by business managers to support decision-making at every stage of a product's life cycle. Although the “PLC Model” itself is subject to many interpretations with some advocates theorizing five or even six stages, it will always remain fairly flexible and adaptive to many product categories.
The “PLC Model” is yet another tool managers have when dealing with dynamic
and complex situations that abound in the world of proactive product planning
and product marketing.
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