Introduction
Product life cycle is a concept within the marketing field describing how a product is developing and progressing since the inception of its idea, throughout its stages until its removal from the market (Schramm-Klein & Wagner, 2011). However, not every product end up in the final stage since some maintain their markets while others rise only to later fall. The main stages that a product undergoes in its life cycle are as follows. The first stage is the introduction/development which entails the research, development, and launch of the product or service. The next stage is called growth in which a rise of product-sales is seen. The third stage is maturity where sales are almost at their optimum but the rate of increase in sales has begun to slow. The last stage is decline where the sales of the product start falling. Companies always try to find ways in which their products and services can avoid the last stage and is referred to as product life cycle extension (Enis et al., n.d.). This paper evaluates two strategies that can be used by companies for the extension the life cycle of products and services.
The ultimate outcome of products as to whether they continues to grow or fall is dependent on three main factors that include customer preferences, the economic condition of the market, and the prevailing competition in the market share (Enis et al., n.d.). Thus, there are extension strategies which refer to marketing schemes intended to increase the life cycle of products and delay the period that a product will take to decline in sales. Extension strategies entail amending the product marketing mix or production designs that may include upgrades or updates, alteration of packages or presentations, an addition of new features and designs or reduction of prices. The decision of a company to continue the sale of products even after getting to the saturation point or decline stage brings the need to extend the life cycle of product.
Most companies manufacture products and services which undergo a pattern that can be predicted since its conception all the way until its obsolescence. Companies mostly employ various extension strategies that aim at staving off the decline of their products and services, increase maturity stage of products, and maybe stimulate a renewed growth stage for the products and services. The strategies can be categorized as either an alteration of the marketing strategies or altering the products and services themselves (Smith, n.d.). The market share and competition conditions may be affected by many reasons which may include a threat of new entrants which disrupt the existing market conditions, a threat of substitution by consumers, and the suppliers’ power of bargain. In addition, consumers’ power of bargain and rivalry within the market determine the products and services life cycle. Companies must, therefore, seek to extend product life cycle so as to acquire a competitive advantage so as to maintain the market share and remain profitable.
Life cycle extension strategies
The two strategies that this paper discusses are; re-engineering of the product and change of the marketing mix. Reengineering of the product refers to the examination and changing of a product to reconstitute it into a new design and implementing the new product. It entails investigating the existing product and its functionality so as to increase the understanding of the product and helps in improving or enhancing the uses and functionality of the product. An investigation is done by looking at the production design, surveying the engineers in the manufacturing department, and an in-depth examination of the product. This will help companies in the improvement of the product as it will now add new functionalities and other useful modifications to the products and services (Sellars, n.d.). The new uses will expand the market of the product while the new modifications and functionalities will enhance the ability of the product to perform its uses efficiently and be up to the standards that the consumers require.
Reengineering involves the following activities; finding new uses and adding new features to the products and services, innovating and improving products and services, changing how the products and services are packaged and updating products and services. Finding new uses and addition of new features has the potential to spark a new demand for a product and has a great impact on a product’s life cycle. Products have an inclination of growing stale after some time in its market because consumers usually adjust to the features and characteristics that previously rendered products unique (Quain, 2018). Therefore, the decline of products and services is usually associated with familiarity and the requirement of consumers to feel that an old product has gained a new form.
Addition of new features to a product has proven to be an effective scheme in extending a product’s life cycle. An example of such a feature is a company that produces a car with a certain speed can increase the speed options to excite its consumers. An example of a company which employed the strategy of new uses for the products and services in Arm & Hammer which devised many uses for their baking soda product from being used as a bath salt, toothpaste, cleansing material, and removal of odor. Other major beneficiaries of this strategy are mobile phone companies as they add functionalities for their products and services from cameras, GPS services, amongst other new utilities of their products and services (Quain, 2018).
Innovating and improving products and services helps maintain the success of a product in the market. Failure to innovate usually results in loss of market to competitors, loss of consumers who have been using the product for a long time, and faster reaching of decline stage in the life cycle stages. Innovating and launching new products and services makes companies increase their market share and probably propel them to being a market leader. Companies can undertake the following steps in innovation and improvement of products and services; making an apt response to prevailing trends and market competition, checking on the product and building upon it according to consumer responses, and identifying a unique selling point and exploiting it to the maximum (Wiersema, n.d).
Automobile companies should consider innovating so as to meet the consumers’ and market trends which include innovating to attain the modern styling and incorporate new technology in the vehicles. Production of low-fuel consumption products and services with increased safety mechanisms and reduced engine emissions are apt innovations that can increase the life cycle of their products and services. Innovating engine designs and performance can also prove vital for being the preferred consumer choice. In addition, the major improvements that can increase a product’s life cycle involve elimination of consumer-perceived malfunctions either in the construction or technology parts (Schramm-Klein & Wagner, 2011). This will also help in being considered competent and reliable by the consumers hence maintaining the market share.
Changing the packaging of products and services has been found to increase the loyalty of the consumers to a product. Consumer decisions are usually founded on the package of a product as many would rather buy an attractively packaged product. Repackaging of a product helps it acquire a new and improved impression on the consumers and appeal to prospective new consumers. Repackaging involves altering the material of packages, the color schemes on the package, improvement of design elements, a change of the dimension of the product’s packaging, and altering the words and pictures on the packages (Smith, n.d.). Giving a product a new look or appearance has the potential to rejuvenate sales.
Companies can appeal to new consumers by changing their product’s packaging such as packages that can be used just once or by introducing mega-pack varieties. They can change packages from cans to foil-pouches for the products and services to look fresher (Quain, 2018). A growing ploy in repackaging has been an incorporation of recycled materials as to attract “green” movement proponents. Automobile companies can undertake subtle alterations of their products and services in various models by the introduction of sleek-design vehicles and executive colors to attract new consumers (Day, n.d.). Changing of packages is also referred to as product rebranding and seeks to make a distinction between a product from the rest and usually changes how consumers perceive a product. Updating a product include incorporation of technology or research and development which results in an updated but similar product. One such company which has used this mechanism is Apple Inc. whereupon launch in the market, its iPod product gained a large market preference and has since undergone many updates and its life cycle has been sustained for a long period of time.
The above were all part of reengineering is considered useful mechanisms for extension of product life cycle. There are several advantages associated with using the strategy of re-engineering of a product. Firstly, examining the product accords the company vital information about the product that is useful for decision-making regarding what alterations are to be made and which specific part of the product. Secondly, it allows companies to integrate new requirements and create updates devoid of scrapping off the whole product after modifying and changing its functionalities. Thirdly, the engineering model and expertise is preserved and makes development cost low for extension of product life cycle (Sellars, n.d.).
The second strategy that companies can use for extension of the life cycle of their products and services is the change of the marketing mix. This strategy involves the acquisition of new consumers for products or services. This is achieved by exploring new market segments/niches or gaining their competitors’ consumers, refining offers and implementing new advertisement strategies, increasing company-consumer relationship. It also involves implementing continuity or recurring revenue packages and enacting new prices for the products or services (Quain, 2018). In addition, changing the distribution channels of the product or services can also extend the product life cycle. This strategy is focused on the consumers and the competitors as opposed to the strategy of re-engineering which sought to change the product itself.
Exploring new markets segments/niches involves incorporation of diversification and entering new market categories that will help gain new consumers for a product. With the facilitation of globalization, companies are now able to access markets across borders which expand the market for a product. When a product or service stays in the same market for a long period of time, it is bound to enter the decline stage of its life cycle and therefore, it is prudent to introduce the product to a new market. This can be a new locality, demographic, or any other prospective market segment with the potential of new consumers and a probability of initiation of a new growth stage (Enis et al., n.d.). This mechanism requires little or no changes to the product or service and will extend the life cycle of a company’s product. Many companies who choose this mechanism can enter the markets of other countries (Smith, n.d.). Entering a new market may also earn a consumer product its competitors’ users.
Refining offers and implementing new advertisement strategies aims at maximizing the profitability of a product (Wiersema, n.d.). It involves engaging in new advertisements and promotional activities and increased penetration into the market. An effective way to increase the profitability of a product or service is the introduction of recurrent or continuing packages that act as follow-up products that aim at value addition to thriving offers. Another effective method of profitability maximization is bundling of matching products to enhance customer interest and appeals to prospective consumers. Companies can cultivate offers to aid in the provision of solutions to the needs of consumers by active and mindful advertisements and promotions. Advertisements aimed at reaching new consumers or piquing the interests of existing customers (Smith, n.d.). Continuity and recurring packages increase retention rates and reduce marketing costs. It begins by promotion and checks on the positioning of the product or service in the market. The necessary elements in such packages include offers of free trials or multiplatform payments, engaging customers, tracking consumer traits, and shipment/delivery methods. By doing this, the company will have extended the growth and maturity stages of the product life cycle (Wiersema, n.d.).
Increasing company-consumer relationship earns the product or service a loyal consumer base which is valuable and powerful (Enis et al., n.d.). This increases repeated purchases and satisfaction of consumers. It is one way of promoting the products to the consumers. It might involve offering bonuses or guiding consumers by the provision of insights and usefulness of products. It also requires companies to ensure that they keep in touch with the consumers to ensure that the consumers are aware that they are cared for and that their feedback on a product is useful (Smith, n.d.). Further, a company can alter the distribution channels for customers such as the introduction of new stores as using social media platforms and online stores. This has tremendous effects on the extension of a product’s life cycle as customers are retained since they feel valued.
The other very important mechanism in a change in marketing mix as a strategy for extension of a product or service’s life cycle by a company is enacting of new product prices. Reduction of prices of products is the best way that companies can respond to the disparities in supply and demand that decline the sales of a product or service. Strategic handling of price reduction has significant importance to a product’s life cycle other than a postponement of its decline and demise. Low prices for certain luxury products and services earn a company new consumers. One good strategy in price reduction mechanism is offering a basic form of the product or service. This strategy has seen many companies succeed for example manufacturers of printers initially offered cheaper and affordable printers which were of basic forms. The giant automobile BMW uses this strategy as it offers consumers low sticker prices in exchange for an opportunity to possess a BMW automobile (Quain, 2018).
The two strategies that this paper has evaluated are re-engineering and change in the marketing mix as strategies which companies can use to extend the life cycle of their products. They are distinctive in their execution as reengineering focuses on structural changes in the product while marketing mix changes focus on the consumer base for the product. These two strategies have proven to be helpful for many companies as the life cycles of their products have been extended and the companies have thus remained profitable with the test of time.