After publishing a post about the product life cycle, I recently discussed the topic with an ex-colleague. His perspective was clear: he views the product life cycle as too theoretical, describing it as more of an academic framework than a practical tool for day-to-day business.
This prompted me to revisit the concept, carefully examining its limitations and reflecting on its practical relevance.
Limitations of the Product Life Cycle Theory
The product life cycle (PLC) is far from a flawless model. While it offers a general framework to explain the patterns of product sales development, only a subset of products adhere to its structured stages. Additionally, the duration of each stage varies significantly.
Here are the most evident limitations specific to medical products:
1. Sales Data Dependency
The PLC relies solely on sales data, which can lead to inaccuracies if sales patterns are irregular due to production issues, supply chain disruptions, or extreme seasonal variations. Moreover, sales data is often consolidated with a time lag, making stage transitions identifiable only in hindsight.
2. Product-Centric, Not Brand-Centric
The theory applies to individual products, not brands. For instance, companies like Stryker, Medtronic, and Philips may have launched and withdrawn numerous products over time, but their overarching brands remain robust.
Take Apple as another example: despite being a universally strong brand, products like the Apple Lisa and the Newton PDA were clear market failures. This distinction underscores that brands and products follow different life cycle patterns, even if interrelated.
3. Variable Stage Duration
Not all products traverse the same life cycle shape. Even when a product passes through each stage, the time spent in each varies significantly.
For example, aspirin has sustained its maturity stage for more than 125 years, with no rapid decline in sight. By contrast, indomethacin experienced a shorter life cycle, declining after the maturity stage into negligible sales of today.
4. Missing Stages
The model assumes that all products follow the same sequence of stages. However, some products never progress beyond the introduction stage, while others, like aspirin, remain indefinitely in the maturity stage without entering decline.
5. Risk of a Self-Fulfilling Prophecy
An inherent risk of the PLC lies in its potential to become a self-fulfilling prophecy. If marketers anticipate that a product is entering the decline stage, they may reduce marketing efforts prematurely, inadvertently accelerating the decline.
The Practical Value of the Product Life Cycle
Despite its limitations, the product life cycle offers several benefits especially for small and medium-sized enterprises:
- It underscores that products have finite lifespans, prompting companies to innovate or improve existing products to sustain sales and profits.
- it serves as a valuable tool for analyzing product performance and identifying the transition to the maturity stage.
The PLC is especially effective as a decision-making framework.
It provides insights into the need for periodic adjustments in the marketing mix, such as pricing strategies. Recognizing a product’s current stage is crucial for maintaining growth and extending its life.
Conclusion
While the product life cycle theory does not capture the nuances of every medical product, it remains a useful tool for disciplined analysis and marketing strategy design.
By leveraging the PLC framework, healthcare companies can make informed decisions to prolong a product’s lifespan. For example, new indications, price reductions, revamped promotional strategies, alternative sales channels, or product enhancements can breathe new life into a product.
Finally, the PLC aids in identifying the right moment to withdraw a product from the portfolio, balancing time, sales volume, and evolutionary stages.
What are your thoughts on the limitations of product life cycle? Let me know in the comments below!
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