Although this represents a limited selection of objectives, it does suggest that there must be a reason for all product-related activities. These reasons are best expressed in the form of specific objectives.
The Product Plan
Once a marketer has determined a set of product objectives, it is then possible to initiate the activities that constitute the product plan. Although there are a number of ways to look at this process, we have elected to explain this process through the product lifecycle concept (PLC). It should be noted that the value of the PLC framework as a planning tool lies at the industry and/or product category level.
The Product Lifecycle
A company has to be good at both developing new products and managing them in the face of changing tastes, technologies, and competition. Evidence suggests that every product goes through a lifecycle with predictable sales and profits, as illustrated in Figure 7.3. As such, the manager must find new products to replace those that are in the declining stage of the product lifecycle and learn how to manage products optimally as they move from one stage to the next.
The five stages of the PLC and their components can be defined as follows:
1. Product development: the period during which new product ideas are generated, operationalized, and tested prior to commercialization.
2. Introduction: the period during which a new product is introduced. Initial distribution is obtained and promotion is obtained.
3. Growth: the period during which the product is accepted by consumers and the trade. Initial distribution is expanded, promotion is increased, repeat orders from initial buyers are obtained, and word-of-mouth advertising leads to more and more new users.
4. Maturity: the pe~iod during which competition becomes serious. Towards the end of this period, competitors' products cut deeply into the company's market position.
5. Decline: the product becomes obsolete and its competitive disadvantage result in decline in sales and, eventually, deletion.