Evaluate the Strengths and Weaknesses of the Concept of the Product Lifecycle. Choose Some Case Studies Familiar to You. How Does the Theory of the Product Lifecycle Drive Marketing Strategy in These Cases?
With the development of technology and the evolution of society, the competition of market has become more and more intense. This phenomenon drives the new ideas of products to come up constantly and makes the time gap become extremely short between the launch and the decline of new products. At the same time, the rate of elimination of a new product is going to increase.
In 1966, Prof. Raymond Vernon released the Product Lifecycle (PLC) theory in ‘International Investment and International Trade in the Product Cycle’. The …show more content…
If the operator decides to quit the market without evaluation, the company will lose a huge amount of profit because the operator misjudges the product lifecycle. I would argue that the product lifecycle curve is sometimes unpredictable, especially in food industry. In early 1997, the Portuguese egg tart was extremely popular in Taiwan. During less than three months, people could see egg tart shops stood almost everywhere on the main street and block, and customers waited for hours in an incredible queue line for the egg tarts. Due to this enthusiastic situation, a lot of investors started to venture a huge amount of money on egg tart business. However, only few months later, customers were bored with the egg tart and the demand dropped dramatically. None of the investor has foreseen what will happen. In early 1998, almost all the egg tart shops disappeared and investors faced a huge loss of profit, and some of them even went bankrupt.
Raymond Vernon (1979) later suggested that the product cycle theory might need to be modified. In the case of egg tart, people could realize that although the product lifecycle could be a powerful tool in providing guidance and marketing tactics, it might be not applicable to some particular cases. Product’s unpredictability could be very risky as well. Furthermore, the product lifecycle theory is only based on time and sales; some external factors such as consumer psychology and product feature are ignored, but these factors