Despite its utility for planning and analysis, the product life cycle doesn't pertain to every industry and doesn't work consistently across all products. Consider popular beverage lines whose primary products have been in the maturity stage for decades, while spin-offs or variations of these drinks from the same company have failed.
The product life cycle also may be artificial in industries with legal or trademark restrictions. Consider the new patent term of 20 years from which the application for the patent was filed in the United States.1 Though a drug may be just entering their growth stage, it may be adversely impacted by competition when its patent ends regardless of which stage it is in.
Another unfortunate side effect of the product life cycle is prospective planned obsolescence. When a product enters the maturity stage, a company may be tempted to begin planning its replacement. This may be the case even if the existing product still holds many benefits for customers and still has a long shelf life. For producers who tend to introduce new products every few years, this may lead to product waste and inefficient use of product development resources.
Why Is Product Life Cycle Important?
Product life cycle is important because it informs management of how its product is performing and what strategic approaches it may take. By being informed of which stage its product(s) are in, a company can change how it spends resources, which products to push, how to allocate staff time, and what innovations they want to research next.
Which Factors Impact a Product's Life Cycle?
Countless factors can affect how a product performs and where it lies within the product life cycle. In general, the product life cycle is heavily impacted by market adoption, ease of competitive entry, rate of industry innovation, and changes to consumer preferences. If it is easier for competitors to enter markets, consumers change their mind frequently about the goods they consume or the market becomes quickly saturated. Then, products are more likely to have shorter lives throughout a product life cycle.
