**5. Life cycle perspective in new product development**

Each product has a life cycle similar to the living creatures: it is born, grows and dies. Eventually, all products will complete the cycle at a time and will die. However, the time the new product will come to the end of the cycle is important for businesses because the main reason behind developing any product is making profit. If the cycle is not sufficiently long to cover any costs endured and make decent profit to the businesses, all the efforts to develop new product will be worthless. Therefore, businesses make an expectation for a desirable life cycle for their new products [2].

The product life cycle has stages similar to the life forms. These stages are: (1) *Introduction stage*: maintenance cost is high at this stage, and profit is limited. Product needs to be sold immediately to earn profit. (2) *Growth*: maintenance cost is lower than the introduction stage, and sales are increased. Competitors are appearing in the market, too. (3) *Maturity*: this stage brings the most profit to the business, sales increase and maintenance cost gets much lower. (4) *Decline and withdrawal*: at this stage, products of competitors are preferred; therefore, profit decreases significantly. At the end, products are withdrawn from the market [10].

There are three major facts agreed on by most about the PLC concept [16]:


There are a few studies about launch of new products, but there are several studies about introduction of new products to the market which will be useful to understand the notion of 'launch' within the context of new product development. There are several important key decisions at the tactical level of new product launch which are called '4Ps' and explained below [17]:

**1. Product launch decisions:** Product launch decisions are about brand choice and product line length (also called product assortment) which are used to decide, the new product's position in the market for determining which customer needs are better satisfied to have high profit and the relative quality of product determining which new product solves customer problems better.

• **Second group:** These are fundamental customer requirements which are found out by assessing the use of products by customers and customer behaviors. For instance, customers may require banks to work outside 9–5 shift. This request may be provided by working

• **Third group:** These requirements are called 'new features' and defined as 'delight' because they are unexpressed and most of the time unknown by customers and excite customers when they are found in the product unexpectedly. They are not known by the customers because customers may be unaware of technical abilities of these products or used to standard products. Even though some new features become available by technological developments, some of them can be provided by understanding customer behaviors and

Each product has a life cycle similar to the living creatures: it is born, grows and dies. Eventually, all products will complete the cycle at a time and will die. However, the time the new product will come to the end of the cycle is important for businesses because the main reason behind developing any product is making profit. If the cycle is not sufficiently long to cover any costs endured and make decent profit to the businesses, all the efforts to develop new product will be worthless. Therefore, businesses make an expectation for a desirable life

The product life cycle has stages similar to the life forms. These stages are: (1) *Introduction stage*: maintenance cost is high at this stage, and profit is limited. Product needs to be sold immediately to earn profit. (2) *Growth*: maintenance cost is lower than the introduction stage, and sales are increased. Competitors are appearing in the market, too. (3) *Maturity*: this stage brings the most profit to the business, sales increase and maintenance cost gets much lower. (4) *Decline and withdrawal*: at this stage, products of competitors are preferred; therefore, profit

**2.** profit per unit increases rapidly in the growth stage and decreases gradually in the matu-

**3.** 'the functional emphasis required for successful product exploitation—engineering and research, manufacturing, marketing and financial control—changes from phase to phase

There are a few studies about launch of new products, but there are several studies about introduction of new products to the market which will be useful to understand the notion of 'launch' within the context of new product development. There are several important key decisions at the tactical level of new product launch which are called '4Ps' and explained below [17]:

decreases significantly. At the end, products are withdrawn from the market [10].

There are three major facts agreed on by most about the PLC concept [16]:

rity phase because competitors enter to the market at this stage; and

**1.** the speed of products at each stage of life cycle is different;

in the cycle as shifts occur in the economics of profitability'.

product uses with conducting market research and new product development.

**5. Life cycle perspective in new product development**

cycle for their new products [2].

70 Marketing

longer hours or by Internet and telephone banking.


NPDs were more often introduced to the markets that have an early stage in the productmarket life cycle. There are several advantages of early entry, but they are not given automatically as there are technological and market uncertainties inherent in the development of new products. Original new products if they are an early follower may be more profitable than being the first in the market:

'The apparent lack of consensus regarding whether new products will be more successful if launched early into markets which are more likely to grow (and not later, into markets with established competition and less growth potential) may be at least partly due to the failure to recognize that different tactics can be successfully deployed for a new product launch in both the growth and maturity phases of product-market development' [17].
