The Product Life Cycle Concept: Buried or Resurrected by the Diffusion Literature?

Abstract

The Product Life Cycle (PLC) concept is a well-known marketing strategy and planning tool. The concept is based on a simple biological analogy of stages over a product's life, which is intuitively appealing, but unfortunately has limited utility in practice. For such a prominent marketing tool, the lack of both a focus on consumers and a theoretical basis is surprising. Diffusion of innovation models and theory offer considerable promise to provide a theoretical basis for the PLC. To date, diffusion models have been limited to explaining and forecasting PLC sales patterns. This paper consolidates this literature to develop an over-arching conceptual PLC model and managerial tool for consumer durables. The approach defines the new PLC phases based on some key consumer trends during product-market evolution, resulting in a four-phased PLC model: Innovation, Imitation, Repeat, Substitute. New marketing strategy implications emerge for each phase due to this additional focus on consumers. The model is operationalized using diffusion models, thereby providing a basis for both identifying and predicting PLC transitions. The types of data that need to be collected to fully operationalize and test this PLC model are discussed. The new PLC model does not ignore variations in PLC sales patterns. Rather, it provides an opportunity to explain such sales pattern variations and determine the underlying conditions that lead to different PLC shapes. An empirical illustration of the new PLC model is presented.