In our previous article, we explored the concept of the product life cycle and why it's imperative for businesses looking to stay competitive in today's market. We learned that a product's life cycle consists of four stages: introduction, growth, maturity, and decline. 

Each stage has its unique opportunities that businesses must carefully navigate to maximize the product's profitability. We also identified the limitations that entrepreneurs must have in mind.

However, managing a product's life cycle is an ongoing process that requires careful planning, monitoring, and adjustment throughout the product's entire life span. 

That's where "product life cycle management" comes in. Throughout this article, we'll explore the meaning, history, benefits, stages, and important metrics for measuring PLM. 

What is product life cycle management?

In simple terms, product life cycle management (PLM) means taking care of a product from the very beginning, when it's just an idea. Until it's completed, marketed, and needs to be improved, replaced or not used anymore in the market. 

This intriguing framework is a comprehensive approach that covers all stages of a product's life, including development, production, distribution, and customer support.

One key objective of PLM is to maximize a product's value to the company and the consumers while minimizing costs and risks associated with it.  

Throughout the product life cycle, businesses will use a range of tools and strategies to manage their products effectively. Some include product lifecycle software, supply chain management tools, customer relationship management software, and market research tools.

The History of product life cycle

The product life cycle management framework has an interesting history that goes as far back as the 20th century. Its origin is credited to Otto Kleppner, a marketing expert and Jones – an employee of Booz Allen Hamilton, a consulting firm with expertise in analytics, technology, engineering, and cyber. 

Kleppner, a well-known marketing expert and author of “Advertising Procedures” was the first to introduce the concept of the product life cycle in 1931.

According to information from Concurrent Engineering (UK) – a product design firm, Kleppner stated that products go through three stages: Pioneering, Competitive, and Retentive. He advised companies to adjust their marketing strategies accordingly at each stage. 

A few decades later Jones of Booz Allen Hamilton developed the first comprehensive PLM framework in 1957. Jones' was based on the idea that product data and information should be managed as a strategic asset across the entire product life cycle. From conception to retirement.

It consisted of five stages: Introduction, Growth, Maturity, Saturation, and Decline. Each stage represented a different phase in the life cycle of a product. He advised that effective management of product data and information was critical to success in each stage.

After the development, in 1985, American Motors Corporation (AMC) adopted it for the first time. This was when the company was struggling to compete with larger, more established car companies like Ford and GM. The framework helped them stay competitive and improve their processes and product.

After creating 3D models of their products during the design phase with computer-aided designs (CAD), AMC would use PLM software to manage the rest of the product life cycle like tracking of all the data related to the product.

This allowed them to collaborate with teams across the organization, share information, and make better decisions

Today, companies of all sizes and industries use PLM to manage product data, collaborate with teams, streamline processes, and more.

What are the benefits of product life cycle management?

Here are 7 benefits of the product life cycle management 

1. A better understanding of product development: By using the product life cycle management framework, you will have a better understanding of the different stages of your product development from conception to market launch. This is the understanding that you would need to plan your product development strategy, allocate resources, and manage risks.

2. Improved product performance: With a clear understanding of the product life cycle, you can make informed decisions about when to introduce new features. Or make changes to your product to improve its performance/value and stay competitive.

3. Enhanced market positioning: By knowing where your product is in its life cycle, you can better position it in the market. You can also develop targeted marketing strategies that will appeal to your target audience at different stages of the product's life cycle.

4. Efficient resource allocation: When you understand where your product is in its life cycle, you can allocate resources more efficiently. Focusing on areas where they will have the most impact on the product's success.

5. Improved customer satisfaction: With a better understanding of your product's life cycle, you can develop products that better meet the needs of your customers, leading to increased customer satisfaction and loyalty.

6. Better forecasting: The product life cycle framework can help you forecast future sales and demand for your products. Allowing you to make more accurate predictions about future revenue streams.

7. Enables you to maximize profits/Stay ahead: By using the product life cycle management framework, you can maximize profits. For instance, you can identify when to introduce new products to replace declining products and take advantage of new opportunities.

What are the stages of product life cycle management?

There are 7 main stages of product life cycle management. Let's dive in

Idea generation stage

As you can probably guess, this stage is the first step in creating a new product. It's the phase where companies or entrepreneurs brainstorm and come up with new product ideas based on various sources of inspiration.

This could be from customer feedback, market research, or even internal brainstorming sessions.

During this stage, the goal is to come up with as many ideas as possible, regardless of how feasible or practical they may be. The aim is to cast a wide net and generate a large pool of potential concepts that could potentially turn into successful products.

It's important to note that the idea generation stage sets the foundation for the rest of the product development process. Without a solid base of potential product ideas, companies would struggle to move forward with creating successful products that meet the needs of their customers.

Read Also : How To Validate Your Business Business Idea

Research and analytics stage

Do you think there's any product that was ever developed without thorough research and analysis? I don't! This stage is where businesses research to gather information and data that can help them make informed decisions about the potential success of a new product.

Methods of gathering information may include surveys, focus groups, and online analytics tools. The goal is to collect as much data as possible about customer preferences, market trends, and competition. 

This information can help businesses understand what customers are looking for in a product. What features they value most. And how they prefer to purchase products.

Once the data is collected, it's analyzed to identify patterns and trends. This analysis can help businesses make informed decisions about the design, pricing, and marketing of a new product. 

For example, the data might reveal that customers are willing to pay more for a product that has certain features, or that a particular marketing strategy is more effective than others.

The planning stage

This is the stage companies identify the goals and objectives of their product to see how it could stand out in the market. It's important to consider factors such as pricing, distribution channels, and marketing strategies to ensure that the product is well-positioned to succeed.

One key aspect of the planning stage is creating a detailed project plan that outlines the financial demand, talent, timeline, milestones, and other resources required for the product's development.

This plan should be realistic and achievable, taking into account any potential roadblocks or challenges that may arise during the development process.

The prototyping stage

Imagine you have an idea for a new product that you want to bring to market. Before you invest a ton of time and money into producing a final product, you want to make sure that it's something people will want to buy. That's where prototyping comes in.

Prototyping is the process of creating a preliminary version of your product. It might not be perfect or fully functional yet. However, it gives you a good idea of what the final product will look like and how it will work.

The purpose of prototyping is to test your product idea in a low-risk way and make any necessary changes before you move on to full production.

The validation stage

The validation stage in product life cycle management is when you're making sure that your product is good to go before you release it into the market. It's the same way you validate your business ideas before thinking about investing in it.

The difference is that it's sort of like a final check-up to make sure that everything is working properly. And that your product meets all of the requirements you set out for it.

Here, you'll typically be running a bunch of tests to make sure that your product is functioning as intended. For instance compatibility tests, and user acceptance tests.

You'll also want to make sure that any bugs or issues that were found during earlier stages of development have been fixed and that everything is running smoothly.

Another important part of the validation stage is making sure that your product complies with any relevant regulations or standards. Depending on what you're making, there may be specific rules or guidelines that you need to follow to release your product. 

The delivery stage

The delivery stage is when the product is finally ready to be launched into the market. This is the stage where all the hard work that went into product development comes to fruition, and it's time to reap the rewards.

In this stage, the product is manufactured and packaged for shipment to retailers or directly to customers. The goal is to get the product into the hands of as many customers as possible and to do that, you need to create demand for it.

Once the product is out in the market, it's time to monitor its performance. This involves keeping track of sales figures, customer feedback, and any issues that arise. This information is crucial for making adjustments and improvements to the product in the future.

The launching stage

This is often a super exciting time. It is the stage where all the hard work of developing and testing the product pays off and the product is finally ready to be introduced to the market.

At this point, the product team is focused on creating buzz and excitement around the product to generate interest and drive sales. This may involve a big launch event, advertising campaigns, influencer partnerships, or other creative marketing strategies.

It's important to note that launching a product is not just a one-time event. Rather, it's an ongoing process of fine-tuning the product, gathering feedback from customers, and adjusting marketing strategies as needed to ensure the product's success.

Of course, launching a new product is not without its challenges. It can be a bit nerve-wracking. However, with careful planning, attention to detail, and a bit of luck, the launching stage can be an incredibly rewarding and exciting time for everyone involved

Important metrics for measuring the effectiveness of a product life cycle management strategy

Below are some metrics you can use to measure the effectiveness of your product life cycle management

Time-to-market

This refers to the amount of time it takes from the idea or concept stage of your product to the launch in the market. Arguably, the faster a product can be launched, the more profitable it can be. And the higher it's potential for success.

If a product takes too long to launch, there's a risk of losing out to competitors and missing out on potential sales.

Sales revenue

It measures the amount of revenue generated by your product during its life cycle. It helps businesses understand how much revenue they can expect to generate from a product and how profitable it is.

By tracking sales revenue, businesses can also identify the most profitable products and allocate resources and investments accordingly.

Market share

Market share refers to the percentage of the total market that a business's product captures. It's an important metric because it shows how well your business is doing compared to its competitors.

A high market share indicates that your business is performing well. While a low market share could suggest that there are areas that need improvement. Businesses can use market share data to identify opportunities for growth and potential threats from competitors.

Customer satisfaction

Helps businesses understand how well their products meet the needs of their customers. A high level of customer satisfaction is crucial for building brand loyalty and generating positive word-of-mouth recommendations.

Tracking customer satisfaction can also help businesses identify areas for improvement in product design and development.

Cost of goods sold

Measures the total cost of producing and selling a product. It's important because it helps businesses understand how profitable a product is and whether they need to make changes to their production processes to improve profitability.

Carefully tracking the cost of goods sold helps businesses to identify areas where they can reduce costs and improve efficiency.

Return on investment (ROI)

This metric takes into account the total costs of development, production, and marketing. ROI is an important metric as it helps businesses determine the profitability of a product and whether it's worth continuing to invest in it.

A high ROI indicates that the product is profitable, while a low ROI could suggest that changes are needed to improve profitability.

Read Also: How to Measure Your Startup's Productivity In 9 Steps

To wrap it up

The numerous benefits of product life cycle management shows it's an important spect of modern business operations. And while the concept of product life cycle management has been around for decades, advancements in technology and the changing demands of consumers have made it even more important today. 

Understanding the various stages of the product life cycle and the factors that influence them is important for organizations to develop effective strategies for their product development, pricing, promotion, and distribution.

Key metrics such as sales, ROI, market share, and customer satisfaction can help measure the effectiveness of the product life cycle and guide decision-making for future product development.