End of Life in Product Life Cycles
The "product life cycle" is a business concept by which inanimate commercial products, like living things, are seen as having a life cycle. People are born and they mature, age and die; products are created, grow in popularity and eventually lose their appeal and market share. At this point, their maker may decide to end the product's "life" and discontinue it, whether it's an individual model or an entire product line, such as typewriters or videocassette recorders.
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The Life Cycle
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The product life cycle has four stages, according to the Net MBA website. Introduction is when a new product enters the market and its maker tries to establish it and build sales. Growth is when the product catches on with customers, more retailers begin carrying it and revenues increase rapidly. At maturity, growth is slower but steady as brand recognition allows the company to spend less on promotion and generate higher profits. In decline, the product is dated and sales start to drop. If the product declines until it's no longer profitable, the maker might decide to terminate it.
Decline and Termination
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According to Net MBA, products decline because customers' tastes have changed, the technology is obsolete or the market is saturated, meaning everyone who wants the product has bought it already. The choices for a company with a declining product are to cut costs and hope competing products will be terminated first, reduce the costs of marketing and manufacturing to make it more profitable or pull the plug on production.
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Cheating the End of Life
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Businesses can try alternatives to ending the product's life; for example, they can market an updated version with new features or find new uses for it the product, according to the Quick MBA website. Releasing updated versions of established computer software, for example, can keep revenue flowing in, even if most buyers already have an earlier version. The University of Texas cites nylon as another example: It's been around for decades, but DuPont has found multiple new uses for it.
Predicting the End of Life
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According to the University of Texas, life-cycle theory has only a limited ability to predict when a product is going to die. Refrigerators, for example, have been in the "mature" stage for years because they're so useful. Some brands of toothpaste, such as Colgate and Crest, have remained strong for years, while multiple other brands started and ended their cycles in the 20th century.
Providing Support
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In the software field, life-cycle planning becomes more complicated because businesses that buy software may need support and technical help even after a company discontinues a particular program. Cisco, for example, offers to provide replacement parts and tech help for discontinued products for several years after the end of the life cycle.
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