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We often hear the term short and long product lives which
reflect upon the idea how product lives are
governed by Technological rate of change. In
other words the need and utility of the
Product gets severely reduced. E.g. VCR no
longer enjoys the source of entertainment it
enjoyed in 1970s to 1990s. Most of the
products exhibit Product Life cycles except
wooden pencils, paper clips, nails, knives
etc.
Cycles of Products or Services normally entail the following
phases.
1.
INTRODUCTION PHASE:
When items are first introduced, it is
received with curiosity. Demand is low in
the beginning then when buyers begin
familiar with the product and see it as a
reliable and good buy, they start buying it.
2.
GROWTH PHASE:
With the passage of time, production and
design improvements lead to decrease in cost
and price becomes an attractive feature with
increase in reliability.
3.
MATURITY PHASE:
When the product reaches maturity stage its
demand can only increase if design is
refined or changed and some differentiation
feature is added this may increase the
demand but when it goes down.
4.
SATURATION PHASE:
In this phase product demand declines and
the market is saturated with either a
compatible product or substitutes.
5.
DECLINE:
In this phase, most of the organizations
adopt a defensive design R&D Strategy in an
attempt to prolong the life of the product
by employing new packaging, redesigning it,
improving its reliability.
As students of Operations Management,
you may be asked to suggest the Product Life
Cycle for Telecom Industry constituents or
in other words where would you place cell
phones, wireless phones, landline phones or
satellite/cable based telephones in view of
the life cycle you just studied. You can
make an attempt to answer this for India as
well as other developed countries.
Download pdf file of Product life cycle |
