The Product Life-Cycle Concept

Because we live and work in a dynamic market situation, managers must accept as the normal state of affairs that all products have a limited life. This fact is commonly expressed in the form of the product life-cycle curve. Products during their existence go through the phases indicated on the curve, as follows:

1. Starting before, sometimes long before, a product reaches the marketplace, there is a development phase. Market research must be undertaken, the product designed, prototypes built, plants laid down. While costs can be very high, income will initially be nil and will probably grow only slowly. Profits are a long way off yet. Many products are slow to ‘catch on’ and this part of the curve typically does not rise steeply.

2. During the growth phase the product reaches general acceptance, and sales increase steeply. Profits mount as development costs are recovered and unit costs decrease with greater volume of production.

3. As the product reaches maturity, initial demand is beginning to be satisfied, competitors may have arrived on the scene, and there will be greater reliance on replacement sales. Sales increase more slowly, and profits come under pressure and may start to decline.

4. When the market is fully saturated, sales will ‘peak off’ and profits decline still further.

5. Finally, sales will go into definite decline and margins come under very severe pressure as it becomes increasingly costly to maintain sales at a reasonable level.

The curve for any particular product may be steeper or flatter, the time-scale may be longer or shorter. Some products seem to go on for a very long time. For this reason the pattern must be applied with care. In addition, we must be careful what we mean by a product in this context: for example, the market for glass has risen steadily over the past 50 years, but within this period the sale of lamp glasses has declined and that of milk bottles has risen steeply (to decline again in some countries in face of competition from waxed cartons or plastic and the change from doorstep delivery to bulk purchase from the supermarket).

Nonetheless the typical pattern stands as a warning that it is dangerous to rely too heavily for too long on one product, so that, as profit from one declines, profit from its successor rises to fill the gap. Ideally this will give a steadily rising profit for the company as a whole, even though some products have entered the ‘decline’ phase of the product life-cycle.

It must be emphasized that the product life-cycle diagram is not a rigid description of exactly how all products always behave. Rather it is an idealized indication of the pattern most products can be expected to follow.

There is nothing fixed about the length of the cycle or the lengths of its various stages. It has been suggested that the length of the cycle is governed by the rate of technical change, the rate of market acceptance and the ease of competitive entry. So, each year numerous new fashion styles are introduced, many of them to last only a few months. At the other extreme, a new aircraft must have many years of life if it is to be commercially worthwhile.

The main importance of the life-cycle concept is to remind us constantly of the three following facts:

1. Products have a limited life;
2. Profit levels are not constant but change throughout a product’s life in a way that is to some extent predictable;
3. Products require a different marketing programme at each stage of their life-cycle.

Implications of the Product Life-cycle

If we have to accept that no product will go on earning profits indefinitely, then we must plan so as to have a whole succession of new products coming ‘through the pipeline’. Peter Drucker has drawn attention to the need to keep all products under review to ensure that not too high a proportion are at the end of their life-cycle. He describes the following six categories:

1. Tomorrow’s breadwinners – new products or today’s breadwinners modified and improved;
2. Today’s breadwinners – the innovations of yesterday;
3. Products capable of becoming net contributors if something drastic is done;
4. Yesterday’s breadwinners – generally products with high volume, but badly fragmented into ‘specials’, small orders and the like;
5. The ‘also raps’ – generally the high hopes of yesterday that, while they did not work out well, nevertheless did not become outright failures;
6. The failures.

Product Elimination

From the product life-cycle concept and Drucker’s analysis of product categories, it follows that all products must be kept under review to assess their present and likely future contribution to profits. A common mistake of marketing management is to keep in the range products that have little or no prospect of contributing to profits. Products are kept in the range until they fade away, meanwhile consuming valuable resources, which could be more profitably utilised elsewhere. These marginal products lower the company’s profitability, and it is essential to control them.


High Personal Productivity Will Bring You Happiness

If you just reflect for a moment on when you have been happiest at work you will probably recall a time when you were busy but also very productive. When we achieve things we feel better about ourselves and this flows through to other areas of productivity. There are a series of steps that you can take to increase your personal productivity and when this occurs you will feel much more relaxed and much happier.

You set long-range goals in both your personal and professional life. Then you work backwards and set shorter range objectives that are tied to your goals. Each objective has a specific target with a deadline and taken one at time they will lead you towards your goal. To do this you have to understand priorities so that you can put them into a logical order. You set goals and objectives, then you rank them in priority order and make a personal productivity plan based on them. Your personal productivity plan fits within your ideal day where you have blocked off certain times to fulfill key tasks.

Your ideal day is a purely personal productivity plan. You know from your own experience your own energy cycles. You know when you are most productive and you know when you’re least productive. If you take this into account when you are planning your day, you will do your high priority tasks during your time of peak productivity and do your low priority tasks when your productivity levels drop. This is a logical way to ensure that you have the energy resources to deal with what you’re doing at the time.

To achieve high levels of personal productivity, you need to start off with your long-range goals and objectives. Once you’ve done that, you will now be in a position to relate the day’s activities to those goals. Your priorities will be sorted out relatively simply. The more an activity contributes to your goal, a higher priority it receives. You can schedule your tasks according to priorities and also to your own energy cycle.

By writing all this down, you can use the plan to guide you through the crises, the interruptions and the unforeseen circumstances that occur every day in a dynamic workplace. Being able to see the plan is of the utmost importance because you can actually show other people and once they see what you have written down, they are aware of where your priorities lie. Without question, if you want to raise your personal productivity, make more effective use of your time and talent, become happier and more fulfilled, then you should make a daily plan in writing and stick to it.

Defining Personal Productivity

For me, personal productivity means the ability to deliver results when needed, may it be something to your boss or for yourself. Furthermore, the results should be achieved without too much negative stress. How often have you achieved this? Most of us have been truly productive quite seldom. I think that this is something that can be developed, by learning a specific set of six crucial skills. I’ll run them down for you below.

Learning is important for personal productivity. Just think about all the new stuff and things we need to learn, only to keep functioning. If nothing else, the user interface of Facebook has suddenly changed, and you have to learn that all again. Ways to learn more easily include faster reading, using mind maps, and for the more advanced also mnemonics (the art of memory tricks).

Organization skills are also very important, as we are constantly overflowed with new things, papers, and information. Some things we should keep and store, others we should immediately get rid of, or they will just increase the amount of clutter lying around. Personal organization methods can really come handy at such situations. Just think what it means to your productivity,when you manage to find that receipt from 2 months ago within 30 seconds of the situation when you need them.

I see time management as a sub skill to personal productivity. With time management, we refer to the art of keeping your calendar in order, and managing task and email. Good time management also means minimizing the time used for procrastination.

In order to get results, we also have to keep fit mentally. Stress will wear you down, if you are not careful. Luckily there exists practices like mediation, but doing sports and meting friends will do as well. The point is, however, this: even in the most hectic work situations, keep calm. With a stable mind, everything is easier, which leads to increased productivity.

One interesting area is creativity. Our work today if filled with problems, and basically we all get paid for solving them. Can you imagine that there actually exists dozens of small tools to help you on that area? Having creativity handy when you need it, will help you finish that presentation your boss is waiting for, making you both happy. Your boss gets his fast delivery, and you can go home earlier.

Last but not least we have decision making. We all know people who cannot make even the smallest decision, they simply don’t have the guts to do it. What do I say again? There exists tools to help you.

Putting in some effort and studying even little in the areas above will help your personal productivity.