Product Life Cycle (PLC) and New Product Development (NPD) are two distinct concepts in marketing that are related but serve different purposes in the product management process.
Product Life Cycle (PLC)
The Product Life Cycle refers to the stages through which a product passes from introduction to decline in the marketplace. These stages include:
- Introduction: The product is launched into the market. Sales are typically low as consumers become aware of the product and its features. Marketing efforts focus on building awareness and generating initial sales.
- Growth: Sales begin to increase as more customers adopt the product. Competitors may enter the market, leading to increased competition. Marketing efforts focus on expanding market share, building brand loyalty, and capturing new customer segments.
- Maturity: Sales reach their peak as the product becomes widely adopted in the market. Competition intensifies, leading to price competition and margin pressures. Marketing efforts focus on maintaining market share, defending against competitors, and extending the product's life cycle through product improvements and innovations.
- Decline: Sales start to decline as the product becomes obsolete, or consumer preferences shift towards newer alternatives. Marketing efforts may focus on niche markets or discontinuing the product altogether.
New Product Development (NPD)
New Product Development refers to the process of bringing a new product or service to market. It involves various stages, including idea generation, concept development, product design, testing, and commercialization. The goal of NPD is to identify and develop innovative products that meet consumer needs and create value for the organization.
Distinction between PLC and NPD
- PLC focuses on the life cycle of an existing product, tracking its progression through different stages in the marketplace.
- NPD focuses on the process of bringing a new product to market, from conception to launch, involving activities such as research, design, development, and commercialization.
Example: Product Life Cycle of a Small Passenger Car
Let's consider the product life cycle of a small passenger car, using the example of the Toyota Corolla, one of the best-selling small cars globally:
- Introduction (2003-2008): The Toyota Corolla is launched with features emphasizing fuel efficiency, reliability, and affordability. Marketing efforts focus on highlighting its practicality and value proposition. Sales gradually increase as consumers become aware of the new model.
- Growth (2008-2015): The Corolla experiences rapid growth in sales as it gains popularity among consumers seeking a compact and economical vehicle. Toyota introduces new variants and updates to the model, such as improved fuel efficiency and enhanced safety features. Competition intensifies as other automakers introduce competing models in the small car segment.
- Maturity (2015-2020): The Corolla reaches maturity, becoming one of the best-selling cars globally. Sales stabilize at high levels, but competition remains fierce. Toyota focuses on product differentiation through design updates, technology enhancements, and marketing campaigns emphasizing reliability and longevity.
- Decline (2020-present): The Corolla faces declining sales as consumer preferences shift towards SUVs and electric vehicles. Despite efforts to refresh the model with updates and redesigns, sales continue to decline as the market becomes saturated with newer alternatives. Toyota may consider discontinuing certain variants or introducing hybrid/electric versions to adapt to changing market demands.
Conclusion
Product Life Cycle and New Product Development are essential concepts in marketing, each serving distinct roles in the product management process. While the Product Life Cycle tracks the progression of existing products through different stages in the marketplace, New Product Development focuses on the process of bringing new products to market. By understanding these concepts and their respective stages, marketers can effectively manage product portfolios, innovate, and adapt to changing market dynamics to drive long-term success and growth.
Subscribe on YouTube - NotesWorld
For PDF copy of Solved Assignment
Any University Assignment Solution
.webp)
