Page 5: The product life cycle
When considering investing in research, development and design, a business should always be aware of the product life cycle (PLC) associated with the products in its portfolio. The life of a product is the stages that relate to the pattern of sales. These are outlined in the table.
The time period associated with the product life cycle will vary according to the product and other influences. For some, the whole life cycle could be a matter of days or weeks, for instance a piece of fruit. Others may be months, for instance seasonal items like fashion garments. For Portakabin, its products are expected to last decades. It is important to adapt the marketing mix in order to respond to changes in the market. Marketing strategies such as seeking new markets, promotion, pricing and developments that add value can extend the PLC.
The YBS is in the introduction stage of its life cycle. Portakabin has invested heavily in promoting this product to increase awareness in the market and help make the launch successful. Examples of how interest has been created in this new product include an extensive development of its website which promotes the benefits and attributes of the YBS. Existing customers have also been introduced to YBS through direct mailing.
Depending on where the product is in the life cycle, different marketing strategies will be used. The key is to recognise how sales are changing and the effects of competition on sales and profits. Most businesses will seek to develop new products to launch so that the growth period coincides with the saturation stage of existing products. This enables a smooth transition and enables profits to be maintained. The profits from products in the maturity stage tend to finance the development of new innovations.
The commitment of Portakabin to constant innovation has been one of the main reasons it remains a market leader. As the sales of YBS grow the future success of the product will help finance further research and development.