Explain Product Life Cycle Management (PLM).
A business organization in order to initiate its business related activities should be aware of the processes that need to be incorporated and maintained for proceeding with development and growth process. Appropriate and well-informed knowledge about the products to be produced along with the presence of the advanced technology, are the required fields that have to be taken into consideration during the inception of the business organization. Proper know-how about the concepts of the product life cycle and product portfolio are the major factors determining the future progress of the companies (Sharma et al. 2016.).
Product Life Cycle Management (PLM):
PLCM or the Product Life Cycle Management refers to a business solution or a business approach that deals with the aspects involved in managing various processes related to the entire lifecycle of a product. These processes include right from the inception, designing, manufacture to the service and disposal of the products. PLM is one of the phases of the entire marketing process, right from the inception of the product in the market till the selling of the products. The people remain aware about the price of the products and about the constituency of the new products launched (Yue et al. 2013). Hardly, people are informed about the complete process of the PLM or the management of the life cycle of the products that are launched in the market. Therefore, Theorode Levitt did mention in one of his articles, that PLM or the Product Life Cycle Management is akin to the Copernican view of the universe. In case of the Copernican view of the universe that was devised by Copernicus, people came to know about the whole concept, but they hardly incorporated the fact into life. The product life cycle management shows the manner in which the span of any product is maintained in the market (Al-Refaie and Bata 2016.). The entire process of sales of any particular product reveals a definite pattern or structure. This pattern of the sales is known as the Product Life Cycle Management. The cycle consists of four definite stages, namely, Introductory stage ,Growth Stage, Maturity stage and Declining stage.
Preceding the Introductory stage, there is the stage of Research and Development. The business firm incorporate specific industrial processes of Research and Development to upgrade and review the quality standards of the product before launching.
The next stage is the introductory stage that initiates the process of PLM. At this stage, the business organization introduces or launches the product in the market. During this time, the demand for the product is minimal, as this is the stage when the consumers are in the process of perceiving the features and the standards of the product.
Growth stage is the second stage of the PLM. This is the stage when the product begins to gain its demand, and the demand graph records an upward rising status. This is the moment, when the customers develop a trust over the product’s quality and suggest other consumers to do so (Askham et al., 2013).
The third stage is one of Maturity. This is the stage, when the product’s demand continues to record a growth; however, there remains a decreasing trend in the demand.
The last or the fourth dimension in the PLM is the Declining stage. At this stage, sales and the sales revenue of the product begins to decline. This is the phase that shows the fact that it is difficult for any product to continue its demand or sale with the same intensity throughout (Stark 2016.).
In relation to the concept Product Lifecycle, many critics and authors did put forth various opinions. It has been proposed by few critics that that PLM or the Product Lifecycle Management process cannot be taken as a model or framework to measure or anticipate the changes that may occur in the sales revenue that can be incurred from the product, or in its demand structure. Neither this model can be presumed as a suitable framework for assessing any alternative strategies for the product. On the other hand, other critics such as Dhalla and Yuseph, opined that the it is not possible always judge the expected sales growth or demand for the product that may take place n the future. It is known that the market for any product is based on the current and expected sales growth as well as on the expected competitive intensity for the product. Thus, it is also difficult to judge or anticipate at which stage the product can be at any particular time. Moreover, PLM is such a strategy that only informs about the stages of the product that a product undergoes after it is launched in the market; however, it does not take into consideration any issue from the consumers’ viewpoints (ElMaraghy et al. 2013).
An analysis of Product Life Cycle of Kellog’s Nutri Grain (A Leading Brand in the manufacturing of the Cereals):
Kellog’s is known as one of the chief brands in terms of the breakfast cereals. Kellog’s brands or the products have become the most common names around the world.
At the initial stage financial uncertainty is common due to high expenditure incurred to develop the product and investment made for promotion and extensive research expenditure. Advertising is an highly expensive part of marketing as the marketing managers have to make their customers aware of their new product (Meinrenken et al. 2014.).Although introduction is a highly expensive and uncertain stage there are ways to assist the product through the unpleasant stage;
Selective distribution- distribution should begin at one place and reaction of the customers should be evaluated
Introduction of various sales related schemes and discounts for attracting the demand of the consumers.
Advertising and Management – Proper promotion of the brands, in order to develop consumer awareness.
One of the most important products of Kellog’s, i.e., Kellogg’s cornflakes, has reserved their market position for a long time.
Nutri Grain was launched in 1997 and it was an immediate success as it was brought into the market to meet up with the needs of busy life when people hardly have time to prepare their breakfast. Nutri-Grain received about 50% share of the cereal bar market in just two years which was a great achievement for a product of any kind (Kwak and Kim 2015).
The second stage is that of growth stage where the consumer acceptance for the product and the sales rises. During this stage competitors up grades the information about the product sales and starts developing the competitive products. Nutri-Grain’s sales steadily increased as the product was promoted and became well known. It sustained the growth in sales till 2002. The market position of Nutri-Grain also subtly modified from a ‘missed breakfast’ product to an ‘all-day’ healthy breakfast or snack, thereby increasing its sales. (Varley 2014).
In maturity stage sales continue to grow up to a certain extent. But, eventually it falls down due to increase in the competition by the competitors. As competition grows, the producers have to cut the prices for the sake of maintaining the demand for the product (Belasco 2014). Kellogg’s Nutri-Grain bars faced tough competition from Alpen bars, which offered the same features as did the Nutri-Grain bar. This slowed down the growth of the market for the Nutri Grain. Kellogg’s was one of the strong companies who fought for their product to succeed and overcome this stage. Kellogg’s continued to support the development of the brand but some products such as Mini’s and Twists find competition in the crowded market. Elevenses continued to progress with its demand; this was not enough to control the overall sales decline.
The last stage in the PLC is the stage where the sale starts decreasing. Profit level is extremely low at this stage as the company has to reduce the price of the product in order to keep make the customers buy the product. By mid-2004 Nutri-Grain found its sales diminishing at the same time the market continued to grow at a very slow pace. Clearly, at this point, Kelloggs had to make a key business decision (Ding et al. 2014). Sales were falling; the product was in decline and losing its position (Schenkl et al.2013).
However, at present the market condition of the brand in the market proves that Kellogg’s has been able to retain its quality standards in the global market. The Product Life Cycle of Kellog’s Nutri Grain has been also managed well throughout these years, as the market share of Kellog’s has shown stability without any drastic rise or fall in demand and supply. The quality and benefits of the product with reasonable cost structure enables the consumers to satisfy their needs in everyday life (Corallo et al. 2013). Thus, in case of any kind of product, if the quality levels and the ethical standards are maintained judiciously, it becomes possible for the lifecycle of the product to complete the cycle but without losing its constancy in the market zone.
Introduction to Product Portfolio:
Product Portfolio refers to the range of the products that an organization manufactures or deals with in the market. A particular organization may comprise of different categories of products, which together form the Product Portfolio (Archibald and Archibald 2015). For instance, in the case of Hindustan Unilever, the brand consists of various types or an entire range of products, namely, Dove, Vaseline, Pepsodent, Lakme, Lux, Clinic Plus and many more. In case of the brand Unilever, the product Portfolio of this brand comprises of a huge range of products (Gyulai et al.2014.). The company excels in the production of different products that serve the individuals in the fields of sustainable living, personal care, refreshment, entertainment. Brands like, intercos, Lumi, REN, Sunlight, Dove, Surf Excel, CyDen, Lux, Lifebuoy, ioma, B.LAB, iluminage and many more constitute the product portfolio of the Unilever. Product Portfolio Management is such a strategy that helps the organization in managing a wide range of products. In a company, there exists many departments, and thus, in order to manage the functioning of all the departments, the company sets forth a different and separate managerial department that deals with and manages the supervision of all other departments of the company. In the similar manner, the incorporation of the concept of Product Portfolio along with the Product Portfolio management is required to manage and supervise the sales and supply of various products manufactured by the organization. The concept of the Product Portfolio Management did originate through the research that had been conducted in the arena of NPD or the New Product development. Introduction of a wide variety of new products in a company with new innovative measures is integral for an organization to prosper in the market (Li et al l2013.). When a company is able to conduct the Product portfolio Management, the company is ensured of a planned business strategy. Furthermore, if the management strategy is superior and upgraded , especially the one that is involved in the innovative measures, prudent selection, better allocation of resources and evaluation and decision making procedures, the growth of the firm in the global market zone is inevitable (Kim et al.2013). Thus, appropriate analysis of the Portfolio decisions; demand a clear understanding of the intersection among the resources, the needs of the clients of the company as well as those of the consumers and the technological strength of the organization. Four goals are associated with the strategy of the Product Portfolio Management. These include maximization of the value of the Portfolio, achieving the correct form of balance between the projects, having a strategically aligned portfolio and suitable allocation of the resources (Go 2015). Decision-making related to the portfolio is regarded as one of the most important processes or factors associated with the process of NPD of an organization.
In case of one of the most well-known companies of the world, Kellogs, the aspect of the Product Portfolio management becomes very important. The presence of a varied set of products that are sold by the organization in the field breakfast cereals, demands the company to undertake favourable allocation of resources and decision making strategies in order to maintain its stability and progress in the world market (Abbey et al. 2013.)
Product Portfolio of Apple:
Apple Inc. Has proved itself to be one of the most innovative companies in the field of technology. It caters to a wide range of people and meets wide scope of demands. The company has been successful to satisfy the changing trends in the demand criteria of the consumers across the world (Giachetti and Dagnino 2015). Starting from Desktop and Portable Computer, it has excelled in dealing with the products like, iPod, iPhone, Smartphone and in the introduction of iTunes (the online music store). Various products in the Apple Portfolio face challenges in the market from the other competitors. These competitors are able to provide the same devices at low process unlike apple, thereby incurring less profit in order to compete with Apple. This happens mainly with the music products and services. However, the founder of the company Steve Jobs had aimed to provide the quality services to the consumers and anticipate the changing demands of the customers beforehand (Li et al.2013). Thus, the product Portfolio Management of the company is able to succeed in its innovations and strengthen its Product Portfolio by providing latest products and value-added services to the consumers. This helps the company to retain its stability in the world market, although the cost structure of the company’s products and services may be high.
Thus, it becomes clear that the Product lifecycle management strategies and the Product Portfolio management are the two major strategies of any business firm that are required to be strictly followed for the sake of encouraging and enhancing the business interest of a company (Chang et al.2014.).PLM is actually concerned with the process of updating and managing knowledge about the creation and management of the product and the technology that is implemented in the production of the product. PLM is the means that provide information about the product to both the concerned business organization and its extended enterprise as well as to the consumers. PLM consists of a set of business solutions that can give the right information about the product at the right time. On the other hand, when a company is engaged in dealing with a large number of products, it becomes a tough job for the organization to deal with the management of all the products in a prudent manner. Therefore, Product Portfolio is incorporated by the organization to manage the hierarchy of the products in terms of their supply and sales (Meinrenken et al.2014).
Maintenance of accurate supply and sales strategies, incorporation of the new products with the help of the innovative technologies, recruitment of specialized individuals in different departments of a company for the incorporation of developmental decisions in the company are the major prerequisites for the growth of a business (Hitt et al.2012.). These rudiments, if followed, can make the sales and supply curve of a company to move upward. These strategies coupled with PLM and Product Portfolio management can contribute towards the betterment of the promotion a particular product.
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