The Product Life Cycle (PLC) strategy allows the marketers to manage the life cycle of a product or in some instances arguably a brand (Suttle R, 2009). Multiple factors, such as new innovations, technology, and intense competition affect brands and product launches, ultimately affecting the PLC. However, product development typically can be categorised into five stages: initial development, introduction to market, product growth, maturity and the decline phase (PLC, 2015).
We are currently in the product growth stage with the highest number of units sold within the CESIM simulation; consequently our next step would be maturity, when sales slowly start to dwindle as we reach market saturation. Throughout this stage it is essential to increase R&D for product reinvention and repositioning or the possibility to expand into developing markets (Suttle R, 2009). This decision ultimately could prove to be very lucrative for the group by extending the PLC. Nevertheless, we should factor in loss leading and price slashing by our competitors who may attempt to exploit this to increase their market share.
Unfortunately, the PLC has several limitations which need to be considered, such as reliability of the PLC model, makes mistakes more frequent. Other limitations include “… occurrence of a product life cycle is not a certainty…” (Joseph, 2015). Other factors including changes in consumer preference, market saturation or new technologies can render the PLC inadequate as there are no guarantees a product will reach it to the maturity phase.
We utilised the PLC model to manage the product from inception, to measure progress and improve existing products in order to retain the highest margins and best share price.