Product Life Extension
Deciding when and how to extend the product’s life is of paramount importance as it directly affects the company’s competitiveness in consumer markets. The development of product technology during the growth stage of the PLC will eventually help the company to create second-generation product technology and gain more competitiveness over newcomers to the market. The ability to generate second-generation products creates continuity, sustainability, and strong presence in markets. Discontinuity creates disruption and changes consumer behaviors to the advantage of superior products. Thus, the company’s presence will be directly linked to the second-generation products’ performance, which itself is ultimately dependent on the company’s continuous innovativeness and ability to develop new technology while older products are being consumed. This continuity and its importance are described and illustrated by Christensen (1992) as “technology S-curves.”
As Fig. 3.6 shows, the company needs to pass the discontinuity stage or paradigm shift quickly without opening the door to new competitors. During this shift, the company needs to re-evaluate both its own and competitors’ product competitiveness. Most products’ lives are shortened if they do not maximize quality and reliability while minimizing costs during consumption. It can be suggested that the company should start planning second-generation products as early as the growth stage in order to jump ahead of potential future competition without discontinuity. The fact that it is at the growth stage that companies start implementing product differentiation strategies as a result of increasing new entrants to the market, can help companies to shape their product line. At this stage, the company can eventually enlarge its product line by adding new versions of the product to the mix. Potential product problems during the introduction stage are also fixed by the growth stage, providing the company with a clearer and better outlook for the future of the product.
The company’s main concern is to find a way to extend the product’s life so it can reach continuity. If the company fails to consider new product development, the experience, benefits, and market share gained as a result
Fig. 3.6 Innovation discontinuity and competitiveness
Source-, http://innovisio.blogspot.com/2012/12/capturing-opportunity-indisruption.html of previous marketing efforts will all be wasted. Continuous product modification lies at the heart of product life extension. A new version or newly developed product is introduced to the market when the old product is declining and sales numbers pick up where they left off with the old product. When the company introduces new versions of the old product in a sequential order, it can achieve a system of constant product development known as “generational replacement” (Lilien et al. 1992). The goal is to reach continuous and sustainable profitability by modifying the product in parallel with changing market needs and thus extending its life every step of the way. These kinds of product life cycles are especially common in electronic markets as new, improved versions of electronic products continue to flood the market.
Alternatively, the company might prefer to modify the market rather than the product. When the product reaches decline, the company can introduce the same product to a market where it is new or can be perceived as new. This is called market modification. The goal is to find a market where the product has not previously been introduced; it is still new to this market so it can go through the PLC stages, still generate a profit and continue the circle. This strategy is widely used in international markets. The product is exported to a country where it is indeed a new product or is seen as a new product. Another strategy is to find other uses of the product, creating a new market (e.g., a bicycle could be used as a recreational vehicle in tourist locations while remaining a main method of transport in big cities in another country or region). This could also be conceptualized as “usage modification.” A company that can group consumers’ different types of usage and expectations of the product can use these data to help reach sales and profit maximization.