• To convert a tanUilizlug conceptinto a nuuiagerial instriuiieiit

of competitive poiver

EXPLOIT theProduct Life Cycle

By Theodore Levitt

Most alert and thoughtful senior marketingexecutives are by now familiar with the conceptof the product life cyele. Even a handful ofuniquely eosmopolitau and up-to-date corporatepresidents have familiarized themselves withthis tantalizing concept. Yet a reeent survey 1took of such executives found none who used theconcept in any strategic wa)' whatever, and piti-fully few who used it in any kind of taeti-eal w'cxy. It has remained — as have so manyfascinating theories in economics, physics, andsex — a remarkably durable but almost totallyunemployed and seemingly unemployable pieceof professional baggage whose presenee in therhetoric of professional discussions adds a muchcoveted but apparently unattainable legitimacyto the idea that marketing management is some-how a profession. There is, furthermore, apersistent feeling that the life cycle conceptadds luster and believability to the insistentelaim in certain circles that marketing is closeto being some sort of science.^

The concept of the product life cycle is todayat about the stage that the Coperniean view ofthe universe was 300 years ago: a lot of peopleknew about it, but hardly anybody seemed touse it in any effective or productive way.

Now that so many people know and in some

A U T H O R ' S N O T E : This article will appear in a forth-coming book. Marketing Vision, ctlitod by Loc Adlcr.

' For discussions of the scientific claims or potentials ofmarketing, sec George Schwartz, Dcvclov'i'ent of Market-ing Theory (Cincinnati, Ohio, South-Western PublishingCo., 1963); and Reavis Cox, Wroe Alderson, and StanleyJ. Shapiro, editors. Theory in Markctin" (Honiewood, Illi-nois,. Richard D. Irwin, Inc., Second Series, 1964).

fashion understand the product life cycle, itseems time to put it to work. 1 he object of thisarticle is to suggest some ways of using the con-cept effectively and of tm^ning the knowledgeof its existence into a managerial instrument ofcompetitive power.

Since the concept has been presented some-what differently by different authors and lor dif-ferent audiences, it is useful to review- it brieflyhere so that every reader has the same back-ground for the discussion vhich follows later inthis article.

Historical Pattern

The life story of most successful products isa history of their passing through certain rec-ognizable stages. These are shown in EXHIDIT Iand occur in the following order:

Stage I. Market Developnieiit — This is whena neu' product is first brought to nuiiket, bciorothere is a proved demand for it, and oflon hotoie ithas been fully proed out technicalh in all re-spects. Sales are low and creep along slowlv.

Sfflge 2. Market Growth — Demand begins toaccelerate and the size of the total uun-kct expanJi-rapidly. It might also be called (he "Iakeoff Stage."

Stage 3. Market Maturity — Dciiuuid levels otl'and grows, for the most part, only at the replaee-ment and new family-formation rate.

Stage 4. Market Decline — The product beginsto lose consumer appeal and sales drift downwjixl,such as when buggy whips lost out with the adventof automobiles and when silk lost out to nlon.

Three operating questions will quickly occurto the alert executive:

SI

82 HBR Nov.-Dec. 196s

EXHIBIT I. PRODUCT L I F E CYCLE

SALES VOLUME

(DOLLAR iNDEX)20-

— ENTIRE INDUSTRY

YEARS

• Given a proposed new product or service, howand to what extent can the shape and duration ofeach stage be predicted?

• Given an existing product, how can one de-termine what stage it is in?

• Given all this knowledge, how can it be effec-tively used?

A brief further elaboration of each stage u illbe useful before dealing with these questionsin detail.

Development StageBringing a new product to market is fraught

^vith unknowns, uncertainties, and frequentlyunknowable risks. Generally, demand has to^ "created" during the product's initial market'U'vclopment stage. How long this takes dependson the product's complexity, its degree of new-ness, its fit into consumer needs, and the pres-ence of competitive substitutes of one form oranother. A proved cancer cure would require^'rtu;)lly no market development; it would geti'linu'diate massive support. An alleged superiorsubstitute for the lost-wax process of sculpturevasting would take lots longer.

NVhile it has been demonstrated time after^'"ie that properly customer-oriented new prod-"<-t development is one of the primary condi-*'<'ns of sales and profit growth, xvhat have been'""-'monstrated even more conclusively are the'•iUuirjnjr costs and Frequent fatalities associated^̂ 'th launching new products. Nothing seems to

take more time, cost more money, involve morepitfalls, cause more anguish, or break more ea-reers than do sincere and well-conceived newproduct programs. The fact is, most new* prod-ucts don't have any sort of classical life c}clecurve at all. They have instead from the veryoutset an infinitely descending curve. The prod-uct not only doesn't get off the ground; it goesquickly under ground — six feet under.

It is little wonder, therefore, that some dis-illusioned and badly burned companies have re-cently adopted a more eonservative policy —•what I call the "used apple policy." Instead ofaspiring to be the first company to see and seizean opportunity, the' systematically avoid beingfirst. They let others take the first bite of thesupposedly juicy apple that tantalizes them.They let others do the pioneering. If the ideaworks, they quickly follow suit. They say, ineffect. "The ti-ouble w ith being a pioneer is thatthe pioneers get killed by the Indians." Hence,they say (thoroughly mixing their metaphors),"^^e don't have to get the first bite of the apple.The second one is good enough." They are will-ing to eat off a used apple, but they try to bealert enough to make sure it is only slightlv used— that they at least get the second big bite, notthe tenth skimpy one.

Growth Stage

The usual characteristic of a successful newproduct is a gradual rise in its sales curve dur-

ing the market declopnient stage. At somepoint in this rise a miirkcd 'ncrcase m consunicrdemand occurs and sales take off. The boom ison. This is the beginn'ng oi Stage 2 — the•market growth stage. .t this point potentialcompetitors who have been AMitjhing deelo|)-ments during Stage i jump into the i'ray. Thefirst ones to get in are gcncrallv those with anexceptionally effective "used apple policy." Someenter the market with carbon-copies of the oiig-inator's product. Others make functional anddesign improvements. And at this point productand brand differentiation begin to develop.

The ensuing fighr for the consumer's patron-age poses to the originating producer an entirelynew set of problems. Instead of seeking ways ofgetting consumers to try the product, the orig-inator now faces the more compelling problemof getting them to prefer his brand. This gen-erally requires important changes in marketingstrategies and methods. But the policies andtactics nô v adopted will be neither frech' thesole choice of the originating producer, nor asexperimental as they might hae been duringStage I. The presence of competitors both dic-tates and limits what can easily be tried — suchas, for example, testing what is the best pricelevel or 'the best channel of distribution.

As the rate of consumer acceptance acceler-ates, it generally becomes increasingly easy toopen new distribution channels and retail out-lets. The consequent filling of distribution pipe-lines generally causes the entire industry's fac-tory sales to rise more rapidly than store sales.This creates an exaggerated impression of profitopportunity which, in turn, attracts more com-petitors. Some of these will begin to chargelower prices because of later adxances in tech-nology, production shortcuts, the need to takelower margins in order to get distribution, andthe like. All this in time inescapably moves theindustry to the tlireshold of a new stage ofcompetition.

Maturity StageThis new stage is the market maturity stage.

The first sign of its advent is evidence of maa*-ket saturation. This means that most consumercompanies or households that arc sales prospectswill be owning or using the product. Sales nowgrow about on a par with population. No moretUstribution pipelines need be filled. Price com-petition now becomes intense. Competitive at-tempts to achieve and hold brand preference

Product Life Cycle S3

'̂ involve making Hncr and Hner differenti-ations in the product, in customer services., andin the promotion'al practices and claims made forthe product.

Typically, the market maturity stage forcesthe producer to concentrate on holding his ciis-tribution outlets, retaining his shelf space, and,in the end, trying to secure even more intensivedistribution, ^^^hercas during the market devel-opment stage the originator depended heavilyon the positive eff'orts of his retailers and dis-tributors to help sell his product, retailers anddistributors will now frequently have been re-duced Largely to being inerchandise-displayersand order-takers. In the case of branded prod-ucts in particular, the originator must now,more than ever, communicate directly with theconsumer.

The market maturity stage typically calls fora new kind of emphasis on competing more ef-fectively. The originator is increasingly forcedto appeal to the consumer on the basis of price,marginal product diff'erences, or both. Depend-ing on the product, ser ices and deals offered inconnection with it arc often the clearest andmost cffectie forms of differentiation. Beyondthese, there will be attempts to create and pro-mote fine product distinctions through packag-ing and advertising, and to appeal to specialmarket segments. The market maturity stagecan be passed through rapidly, as in the case ofmost women's fashion fads, or it can persist forgenerations with per capita consumption neitherrising nor falling, as in the case of such staplesas men's shoes and industrial fasteners. Or ma-turity can persist, but in a state of gradual butsteady per capita decline, as in the case of beerand steel.

Decline Stage^ '̂hen market maturity tapers off and conse-

quently comes to an end, the product entersStage 4 — market decline. In all cases of ma-turity and decline the industry is transformed.Few companies are able to weather the competi-tive storm. As demand declines, the overcapac-ity that was already apparent during the periodof maturity now becomes endemic. Some pro-ducers see the handwriting implacably on thewall but feel that with proper management anticunning they will be one of the survixors afterthe industry-wide deluge they so clearly foresee.To hasten their competitors' eclipse directly, orto frighten them into carlv voluntarv withdrawal

84 HBR ^ov.-Dec. 196sfrom the industrj-, they initiate a variety of ag-gressively depressive tactics, propose mergers orbuy-outs, and generally engage in activities that

. make life thanklessly burdensome for all firms,and make death the inevitable consequence formost of them. A few companies do indeedweather the storm, sustaining life through theeonstant descent that now clearly characterizesthe industry. Production gets concentrated intofewer hands. Prices and margins get depressed.Consumers get bored. The only cases wherethere is any relief from this boredom and grad-ual euthanasia are where styling and fashioziplay some constantly revivifying role.

Preplanning Importance

Knowing that the lives of successful productsand services are generally characterized by some-tliing like the pattern illustrated in EXHIBIT Iean become the basis for important life-givingpolicies and practices. One of the greatest val-ues of the life cycle concept is for managersabout to launch a new product. The first stepfor them is to try to foresee the profile of theproposed product's cycle.

As with so many things in business, and per-haps uniquely in marketing, it is almost impos-sible to make universally useful suggestions re-garding how to manage one's affairs. It is cer-tainly particularly difficult to provide widelyuseful advice on how to foresee or prediet theslope and duration of a product's life. Indeed,it is precisely because so little specifie day-to-dayguidance is possible in anything, and because nochecklist has ever by itself been veiy useful toanybody for very long, that business manage-ment will probably never be a science — al-ways an art — and will pay exceptional re-wards to managers with rare talent, enormousenergy, iron nerve, great capacity for assum-ing responsibility and bearing accountability.

But this does not mean that useful eff̂ ortscannot or should not be made to try to foreseethe slope and duration of a new produet's life.Time spent in attempting this kind of foresightnot only helps assure that a more rational ap-proach is brought to product planning and mer-chandising; also, as will be shown later, itcan help create valuable lead time for importantstrategic and tactical moves after the product isbrought to market. Specifically, it can be agreat help in developing an orderly . series ofcompetitive moves, in expanding or stretching

out the life of a product, m maintaining a eleanproduct line, and in purposely phasing out dyingand costly old products.-

Failure Possibilities . . .As pointed out above, the length and slope of

the market development stage depend on theproduct's complexity, its degree of new^ness, itsfit into customer needs, and the presenee of com-petitive substitutes.

The more unique or distinctive the newnessof the product, the longer it generally takes toget it succes.>fully off the ground. The worlddoes not automatically beat a path to the manwith the better mousetrap.^ The world has tobe told, coddled, enticed, romanced, and evenbribed (aswith, for example, coupons, samples,free application aids, and the like). When theproduct's newness is distinctive and the job itis designed to do is unique, the public will gen-erally be less quiek to perceive it as something itclearly needs or wants.

This makes life particularly difBeult for theinnovator. He will have more than the usualdifficulties of identifying those characteristics ofhis product and those supporting communica-tions themes or deviees whieh imply value to theeonsumer. As a consequence, the more distinc-tive the newness, the greater the risk of failureresulting either from insuFQcient working eapi-tal to sustain a long and frustrating period ofcreating enough solvent customers to make theproposition pay, or from the inability to con-vince investors and bankers that they shouldput up more money.

In any particular situation the more peoplewho will be involved in making a single pur-chasing decision for a new product, the moredrawn out Stage i will be. T'hus in the highlyfragmented construction materials industry, forexample, success takes an exceptionally longtime to catch hold; and having once caught hold,it tends to hold tenaciously for a long time —often too long. On the other hand, fashion itemsclearly catch on fastest and last shortest. Butbecause fashion is so powerful, recently somecompanies in what often seem the least fashion-

' Sec Philip Kotler, "Phasing Out Weak Products," HBRMarch-April 1965, p. 107.

"For perhaps the ultimate example of how the worlddocs not boat such a path, sec the example of tho manwho actually, and to his painful regret, made a "better"mousetrap, in John B. Matthews, Jr., R. D. Buzzcll, Theo-dore Levitt, and Ronald E. Frank, Marketing: Au hitro-ditctory Analysis (iXeiv York, iVIcGraw-Hill Book Com-pany, Inc.. 1964), p. 4.

influenced of industries (machine tools, for ex-ample) have shortened the market developmentstage b}' introducing elements of design andpackaging fashion to their products.

What factors tend to prolong the market de-velopment stage and therefore raise the risk offailure? The more complex the product, themore distinctive its newness, the less influencedby fashion, the greater the number of personsinfluencing a single buying decision, the morecostly, and the greater the required shift in thecustomer s usual way of doing things — theseare the conditions most likely to slow things upand create problems.

. . . vs. Success ChancesBut problems also create opportunities to con-

trol the forces arrayed against new product suc-cess. For example, the newer the product, themore important it becomes for the customers tohave a favorable iirst experience vith it. New-ness creates a certain special visibility for theproduct, with a certain number of people stand-ing on the sidelines to see how the first cus-tomers get on with it. If their first experienceis unfavorable in some crucial way, this mayhave repercussions far out of proportion to theactual extent of the underfulfillment of the cus-tomers' expectations. But a faorable first ex-perience or appl cat on \ill. for the same rea-son, get a lot of disproportionate^' favorablepublicity.

The possibility of exaggerated disillusionmentwith a poor first experience can raise vital ques-tions regarding the appropriate channels of dis-tribution for a new product. On the one hand,getting the product successfully launched mayrequire having — as in the case of, say, theearly days of home washing machines — manyretailers who can give consumers considerablehelp in the product's correct utilization andthus help assure a favorable first experience forthose buyers. On the other hand, channels thatprovide this kind of help (such as small neigh-borhood appliance stores in the case of washingmachines) during the market development stagemay not be the ones best able to merchandisethe product most successfully later when help increating and personally reassuring customers isless important than u'ide product distribution.To tlie extent that channel decisions during thisfirst stage sacrifice some of the requirements ofthe market development stage to some of the re-quirements of later stages, the rate of the prod-

Prodnct Life Cycle 85

uct's acceptance by consumers at the outset maybe delayed.

In entering the market development stage,pricing decisions are often particularly hard forthe producer to make. Should he set an initiallyhigh price to recoup his investment quickly —i.e., "skim the cream" — or should he set a lowprice to discourage potential competition — i.e.,"exclusion"? The answer depends on the in-novator's estimate of the probable length ofthe product's hfe cycle, the degree of patentprotection the product is likely to enjoy, theamount of capital needed to get the product offthe ground, the elasticity of demand during theearly life of the product, and many other fac-tors. The decision that is finally made may af-fect not just: the rate at which the product catch-es on at the beginning, but even the durationof its total life. Thus some products that ai'epriced too low at the outset (particularly fashiongoods, such as the chemise, or sack, a few yearsago) may catch on so quickly that they becomeshort-lived fads. A slower rate of consumer ac-ceptance might often extend thea- life cyclesand raise the total profits they yield.

The actual slope, or rate of the growth stage,depends on some of the same things as does suc-cess or failure in Stage i. But the extent towhich patent exclusiveness can play a criticalrole is sometimes inexplicably forgotten. Morefrequently than one might offhand expect, hold-ers of strong patent positions fail to recognizeeither the market-development irtue of makingtheir patents available to competitors or the mar-ket-destroying possibilities of failing to controlmore eflectively their eompetitoi's' use of suchproducts.

Generally speaking, the more producers thereare of a new product, the more effort goes intodeeloping a market for it. The net result isvery likeh' to be more rapid and steeper growthof the total market. The originator's marketshare may fall, but his total sales and proiitsmay rise more rapidly. Certainly this has beenthe case in recent years of color television;RCA's eagerness to make its tubes available tocompetitors reBeets its reeognition of the po^verof numliers over the power of monopoly.

On the other hand, the failure to set and en-force appropriate quality standards in the earlydava of pohstyrene and polyethylene drinkingglasses and cups produced such sloppy, interiorgoods that it took years to recover the consumer sconlidcnce and revive the growth pattern.

86 HBFi Nov.-Dec.

But to try to see in advance what a product'sgrowth pattern might be is not very useful ifone fails to distinguish between the industrypattern and the pattern of the single firm — forits particular brand. The industry's cycle willalmost certainly be different from the cycle ofindividual firms. jMoreover, the life cycle of agiven product may be different for differentcompanies in the same industry at the samepoint in time, and it certainly affects differentcompanies in the same industry differently.

Originator's Burdens

The company with most at stake is the orig-inal producer — the company that launches anentirely new product. This company generallybears most of the costs, the tribulations, andCertainly the risks of developing both the prod-uct and the market.

Competitive PressureOnce the innovator demonstrates during the

market development stage that a solid demandexists, armies of imitators rush in to capitalizeon and help create the boom that becomes theftiarket growth, or takeoff, stage. As a result,^hile exceedingly rapid growth will now char-acterize the product's total demand, for the orig-inating company its growth stage parado.xicallyHow becomes truncated. It has to share theboom with new competitors. Hence the poten-tial rate of acceleration of its own takeoflF isdiminished and, indeed, may actually fail to last'is long as the industry's. This occurs not onlybecause there are so many competitors, but, asV̂e noted earlier, also because competitors often

Come in with product improvements and lowerprices. While these developments generally help^eep the market e.xpanding, they greatly restrictŷ e originating company's rate of growth and thelength of its takeoff stage.

All this can be illustrated by comparing theCurve in EXHIBIT II with that in EXHIBIT I,

h shows the life cycle for a product. Dur-Stage I in EXHIBIT I there is generally onlycompany — the originator — even though

the whole exhibit represents the entire indus-^ – In Stage i the originator is the entire in-dustry. But by Stage 2 he shares the industry^itli many competitors. Hence, while EXHIBIT* is an industry curve, its Stage i representsOnly a single company's sales. –•. .

EXHIBIT II shows the life cycle of the orig-

r II. PRODUCT L I F E CYCLECOMPANY

OHIGINATING

SALES VOLUM6(DOLLAR INDEX)

I 5 – –

1 0 – •

5 – .

YEARS

inator's brand — his own sales curve, not thatof the industry. It can be seen that betweenYear i and Year 2 his sales are rising about asrapidly as the industry's. But after Year 2, whileindustry sales in EXHIBIT I are still in vigorousexpansion, the originator's sales curve in EX-HIBIT II has begun to slow its ascent. He is nowsharing the boom witli a great many competitors,some of whom are much better positioned nowthan he is.

Profit SqueezeIn the process the originator may begin to

encounter a serious squeeze on his profit mar-gins. EXHIBIT HI, which traces the profits perunit of the originator's sales, illustrates thispoint. During the market development stagehis per-unit profits are negative. Sales volume istoo low at existing prices. However, during the

iir. UNIT PROFIT CONTRIBUTIONCYCLE — ORIGINATING GOMPANY

(UNIT CONTRI3UT1ON(DOLLARS)

3-

0

– I -*-

-2

– 3YEARS

market growth stage unit profits boom as outputrises and unit production costs fall. Total prof-its rise enormously. It is the presence of suchlush profits that both attracts and ultimatelydesti'oys competitors.

Consequently, while (i) industry sales maystill be rising nieely (as at the Year 3 point inEXHIBIT I ) , and (2) while the originating com-pany's sales may at the same point of time havebegun to slow clown noticeably (as in EXIIHUT11), and (3) while at this point the originator'stotal profits may still be rising beeause his vol-ume of sales is huge and on a slight upwardtrend, his profits per unit will often have takena drastic downward course. Indeed, they willoften have done so long before the sales curveRattened. They will have topped out and begunto decline perhaps around the Year 2 point (asin EXHIBIT in). By the time the originator'ssales begin to flatten out (as at the Year 3 pointin EXHIBIT II), unit profits may aetuaily be ap-proaching zero (as in EXHIBIT H I ) .

At this point more eompetitors are in the in-dustry, the rate of industry demand growth hasslowed somewhat, and competitors are cuttingprices. Some of them do this in order to getbusiness, and others do it because their costs arelower owing to the fact that their equipment ismore modern and productive.

The industry's Stage 3 — maturity — gener-ally lasts as long as there are no important com-petitive substitutes (such as, for example, alum-inum for steel in "tin" cans), no drastic shiftsin influential value systems (sueh as the endof female modesty in the 1920's and the conse-quent destruction of the market for veils), nomajor changes in dominant fashions (such asthe hour-glass female form and the end of waistcinchers), no changes in the demand for primaryproducts which use the product in question(such as the effect of the decline of new rail-road expansion on the demand for railroad ties),and no changes either in the rate of obsolescenceof the product or in the character or introductoryrate of product modifications.

Maturity can last for a long time, or it canactually never be attained. Fashion goods andfad items sometimes surge to sudden heights,hesitate momentarily at an uneasy peak, andthen quickly drop off into total obscurity.

Stage RecognitionThe various characteristics of the stages de-

scribed above will help one to recognize the

Prochict Life Cycle 87

stage a particular product occupies at any giventime. But hindsight will always be more accu-rate than current sight. Perhaps the best wayof seeing one's current stage is to try to foreseethe next stage and work baekwards. This ap-proach has several virtues:

C It forces one to look ahead, eonstantly to tryto reforesee his future and competitive environ-ment. This will have its own rewards. As CharlesF. Kettering, perhaps the last of Detroit's primitiveinventors and probably the greatest of all its in-ventors, was fond of saying, "We sliould all be con-cerned about the future beeause that's where we')'hae to spend the rest of our lives." By looking atthe future one ean better assess the state of thepresent.

C Looking ahead gives more perspective to tliepresent than looking at the present alone. Mostpeople know more about the present than is goodfor them. It is neither healthy nor helpful to knowthe present too well, for our pereeption of the pres-ent is too often too heavily distorted b the ur-gent pressures of day-to-day events. To knowwhere the present is in the continuum of competi-tive time and events, it often makes more sense totry to know what the future will bring, and wivjnit will bring it. than to try to know what the pres-ent itself actually eontains.

e Finally, the value of knowing what stage aproduct occupies at any given time resides onh inthe way tliat fact is used. But its use is alwaysin the future. Henee a prediction of the future en-vironment in whieh the information will be usedis often more functional for the effective capitali-zation on knowledge about the present than knowl-edge about the present itself.

Sequential Actions

The life cycle concept can be effectively em-ployed in the strategy of both existing and newproducts. For purposes of continuity and clar-ity, the remainder of this article will describesome of the uses of the concept from the earlystages of new product planning through thelater stages of keeping the product profitablyalive. The chief discussion will focus on whatI call a policy of "life extension" or "marketstretching." *

To the extent that EXHIBITS II and 111 outlinethe classical patterns of successful new products,

* For related ideas on discerning opportiinitios lor pniil-uct revivification, sec Loe Adlcr, "A Now Oritntiitidii lorPlottirik; a Marketing Strategy," Business Horizons. Win-ter 1964, p. 37.

88 HBR Nor.-Dec. 1965

one of the constant aims of the originating pro-ducer- should be to avoid the severe disciplineimposed by an early profit squeeze in the mar-ket growth stage, and to avoid the wear andwaste so typical of the market maturity stage.Hence the following proposition would seem rea-sonable: when a company develops a new prod-uct or service, it should try to plan at the veryoutset a series of actions to be employed at vari-ous subsequent stages in the produet's existenceso that its sales and profit curves are constantlysustained rather than following their usual de-clining slope.

In other words, advance planning should bedirected at extending, or stretching out, the lifeof the product. It is this idea of •plaitning inadvance of the actual launching of a new prod-uct to take specific actions later in its life cycle•— actions designed to sustain its growth andprofitability — which appears to have great po-tential as an instrument of long-term productstrategy.

Nylon's LifeHow this might work for a product can be

illustrated by looking at the history of nylon.

The way in which nylon's booming sales life hasbeen repeatedly and systematically extended andstretched can serve as a model for other prod-ucts. What has happened in nylon may not havebeen purposely planned that way at the outset,but the results are quite as if they had beenplanned.

The first nylon end-uses were primarily mili-tary — parachutes, thread, rope. This was fol-lowed by nylon's entry into the circular knitmarket and its consequent domination of thewomen's hosiery business. Here it developedthe kind of steadily rising growth and profitcurves that every executive dreams about. Aftersome years these cur '̂es began to flatten out. Butbefore they flattened very notieeably, Du Ponthad already developed measures designed to re-vitalize sales and profits. It did several things,each of which is demonstrated graphically inEXHIBIT IV. This exhibit and the explanationwhich follows take some liberties with the ac-tual facts of the nylon situation in order tohighlight the points I wish to make. But theytake no liberties with the essential requisites ofproduct strategy.

Point A of EXHIBIT IV shows the hypothetical

E X H I B I T IV. H Y P O T H E T I C A L L I F E CYCLE — NYLON

DOLLARSALES

Q^ViftCVCLE ^

YEARS

point £t which .the nylon curve (dominaied atthis point by hosiery) flattened out. It" noth-ing further had been done, the sales curvewould have continued along the flattened paceindicated by the dotted line at Point A. Thisis also the hypothetical point at which the firstsystematic efl;ort was made to extend the prod-uct's hfe. Du Pont, in effect, took certain "ac-tions" which pushed hosiery sales upward ratherthan continuing the path implied by the dottedline extension of the curve at Point A. At PointA action # i pushed an otherwise flat curveupward.

At points B, C, and D still other new salesand profit expansion "actions" ( # 2 , # 3 , # 4 ,and so forth) were taken. What were theseactions? Or, more usefully, what was their stra-tegic content? What did they try to do? Theyinvolved strategies that tried to expand sales viafour different routes:

1. Promoting more frequent usage of the prod-uct among current users.

2. Developing more varied usage of tlie productamong current users.

3. Creating new users for the product by ex-panding the market.

4. Finding new uses for the basie material.

Frequent Usage. Du Pont studies had shownan increasing trend toward "bareleggedness"among women. This was coincident with thetrend toward more casual living and a decliningperception among teenagers of what might becalled the 'social necessity" of wearing stock-ings. In the light of those findings, one approachto propping up the flattening sales curves mighthave been tb reiterate the social necessity ofwearing stockings at all times. That would havebeen a sales-building action, though obviouslydifficult and exceedingly costly. But it couldclearly have fulfilled the strategy of promotingmore frequent usage among current users as ameans of extending the product s life.

Varied Usage. For Du Pont, this strategytook the form of an attempt to promote the"fashion smartness" of tinted hose and laterof patterned and highly textured hosiery. Theidea was to raise each woman's inventory ofhosiery by obsolescing the perception of hosieryas a fashion staple that came only in a narrowrange of browns and pinks. Hosiery was to beconverted from a "neutral" accessory to a centralingredient of fashion, with a "suitable" tint and

Product Life Cycle 89

pattern for each outer garment in the lady'swardrobe.

This not only would raise sales by expandingwomen's hosiery wardrobes and stores' inven-tories, but would open the door for annual tintand pattern obsolescence much the same as thereis an annual color obsolescence in outer oar-ments. Beyond that, the use of color and pat-tern to focus attention on the leg would helparrest the decline of the leg as an element of sexappeal — a trend which some researchers haddiscerned and which, they claimed, damagedhosiery sales.

New Users. Creating new users for nylonhosiery might conceivably have taken the formof attempting to legitimize the necessity of wear-ing hosiery among early teenagers and subteen-agers. Advertising, public relations, and mer-chandising of youthful social and style leaderswould have been called for.

Uses. For nylon, this tactic has hadmany triumphs — from varied types of hosiery,such as stretch stockings and stretch socks, tonew uses, such as rugs, tires, bearings, and soforth. Indeed, if there hatl been no furtherproduct innovations designed to create new usesfor nylon after the original military, miscellane-ous, and circular knit uses, nylon consumptionin 1962 would have reached a saturation levelat approximately 50 million pounds annualiy.

Instead, in 1962 consumption exceeded 500million pounds. EXHIBIT V demonstrates howthe continuous development of new uses for thebasic material constantly produced new wavesof sales. The exhibit shows that in spite ofthe growth of the women's stocking market, thecumulative result of the military, circular knit,and miscellaneous grouping would have beena flattened sales curve by 1958. (Nylon's entryinto the broadwoven market in 1944 substantial-ly raised sales above what they w ould have been.Even so, the sales of broadwoven, circular knit,and military and miscellaneous groupings peakedin 1957.)

Had it not been for the addition of new usesfor the same basic material — such as varpknits in 1945, tire cord in 1948. textured yarnsin 1955, carpet yarns in 1959, and so forth —nylon would not have had the spectacularlyrising consumption curve it has so clearly had.At various stages it uould have exhausted itsexisting markets or been forced into decline bycompeting materials. The systematic search for

90 , HBR Nov.-Dec. 1965

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new uses fdr the basic (and improved) materialextended and stretched the product's life.

Other ExamplesFew companies seem to employ in any sys-

tematie or planned way the four product life-stretching steps described above. Yet the sue-cessful application of this kind of stretchingstrategy has characterized the history of suehwell-known' products as Ceneral Foods Cor-poration's "Jell-0" and Minnesota Mining &Manufacturing Co.'? "Scotch" tape."

Jell-O was a pioneer in the easy-to-preparegelatin dessert field. The soundness of theproduct concept and the excellence of its earlymarketing activities gave it beautifully ascend-ing sales and profit curves almost from the start.But after some years these curves predictablybegan to flatten out. Scotch tape was also apioneer product in its field. Once perfected, theproduct gained rapid market acceptance beeauseof a sound product concept and an aggressivesales organization. But, again, in time the salesand profit curves began to flatten out. Beforethey flattened out very mueh, however, 3M, likeGeneral Foods, had already developed measuresto sustain the early pace of sales and profits.

Both of these companies extended their pro-ducts' lives by, in efl'ect, doing all four of thethings Du Pont did with nylon — ereating morefrequent usage among current users, more va-ried usage among current users, new users, andnew uses for the basic "materials":

(1) The General Foods approach to increasingthe frequency of serving JeIl-0 among current userswas, essentially, to increase the number of Havors.From Don Wilson's famous "six delicious flavors,"Jell-0 moved up to over a dozen. On tlx̂ otlierhand, 3M helped raise sales among its currentusers by developing a variety of handy Scotch tapedispensers which made the product easier to use.

(2) Creation of more varied usage of Jell-Oamong current dessert users involved its promotionas a base for salads and the facilitation of this usageby the development of a variety of vegetable fla-vored Jell-O's. Similarly, 3M • developed a lineof colored, patterned, waterproof, invisible, andwrite-on Scotch tapes which have enjoyed consider-able Success as sealing and decorating items forholiday and gift wrapping.

(3) Jell-0 sought to create new users by pin-pointing people who could not accept Jell-0 as apopular dessert or salad product. Hence duringthe Metrecal boom Jell-O employed an advertising

Product Life Cycle 91

theme that successfully affixed to the product afashion-oriented weight control appeal. Similarly,3M introduced "Rocket" tape, a product much likeScotch tape but lower in price, and also developeda line of commercial cellophane tapes of vari-ous widths, lengths, and strengths. These actionsbroadened product use in commercial and indus-trial markets.

(4) Both Jell-O and 3iM have sought out newuses for the basic material. It is known, for exam-ple, that women consumers use powdered gelatindissolved in liquids as a means of strengtheningtheir fingernails. Both men and women use it i.the same vvay as a bone-building agent. HenceJell-0 introduced a "completely flavorless" Jell-0for just these purposes. 3]I has also developednew uses for the basic material — from "dcublc-coated" tape (adhesive on both sides) Avhich cum-petes with ordinary liquid adhesives, to the leficct-ing tape which festoons countless automobile bump-ers, to marker strips which compete with paint.

Extension Strategies

The existenee of the kinds of product lifecycles illustrated in EXHIBITS I and ii and theunit profit cycle in EXHIBIT HI suggests thatthere may be considerable value for people in-volved in new product work to begin plan-ning for the extension of the lives of their prod-ucts even before these products are formallylaunched. To plan for new life-extending in-fusions of effort (as in EXHIBIT IV) at this pre-introduction stage can be extremely useful inthree profoundly important ways.

1. It generates an active rather than a reac-tive product policy.

It systematically structures a company's long-term marketing and product development eflortsin advance, rather than each effort or activitybeing merely a stop-gap response to the urgentpressures of repeated competitive thrusts anddeclining profits. The life-extension view ofproduct policy enforces thinking and planningahead — thinking in some systematic way aboutthe moves likely to be made by potential com-petitors, about possible ehanges in consumer re-actions to the product, and the required sellingactivities which best take advantage of tlieseconditional events.

2. It lays out a long-term plan designed toinfuse new life into the product at the right

' I am indebted to my collca«iic. Dr. Derek A. Newton,for these examples and other helpful suftgestions.

92 HBR Nov.-Dec. 196s

time, with the right degree of care, and withthe right amount of effort.

Many activities designed to raise the sales andprofits of existing products or materials are oftenundertaken without regard to their relationshipto each other or to timing — the optimum pointof consumer readiness for sueh activities orthe point of optimum competitive effectiveness.Careful advance planning, long before the needfor sueh activity arises, can help assure thatthe timing, the care, and the efl'orts are appro-priate to the situation.

For example, it appears extremely doubtfulthat the boom in women's hair coloring and hairtinting products would have been as spectacularif vigorous efforts to sell these products hadpreceded the boom in hair sprays and chemicalhair fixers. The latter helped create a powerfuleonsume'r consciousness of hair fashions beeausethey made it relatively easy to create and wearfashionable hair styles. Once it beeame easy forWomen to have fashionable hair styles, the re-sulting fashion consciousness helped open thedoor for hair eolors and tints. It eould not haveliappened the other way around, with colorsand tints first creating fashion consciousness andthus raising the sales of sprays and fixers. Be-cause understanding the reason for this preeiseorder of events is essential for appreciating theimportance of early pre-introduction life-exten-sion planning, it is useful to go into a bit ofdetail. Consider:

For women, setting their hair has been a peren-nial problem for centuries. First, the length andtreatment ot' their hair is one of the most obviousWays in which they distinguish themselves frommen. Hence to be attractive in that distinction be-comes crucial. Second, hair frames and highlightsthe face, much like an attractive wooden borderframes and highlights a beautiful painting. Thushair styling is an important element in accentuat-ing the appea'ance of a woman's facial features.Third, since the hair is long and soft, it is hard tohold in an attractive arrangement. It gets mussedin sleep,- wind, damp weather, sporting activities,3nd so forth.

Therefore, the effective arrangement of a wom-an's hair is understandably her first priority in hairCare. Ah unkempt brunette would gain nothingfrom making herself into a blond. Indeed, in aCountry where blonds are in the minority, theSwitch from being an unkempt brunette to being3n unkempt blond would simply draw attention to^'it sloppincss. But once tlie problem of arrange-

became easily "sohcd" by sprays and fixers.

colors and tints coidd become big business, espe-cially among women whose hair was beginning toturn gray.

The same order of priorities applies in indus-trial products. For example, it seems quite in-conceivable that many manufacturing plantswould easily have accepted the replacement ofthe old single-spindle, constantly man-tendedserew machine by a eomputerized tape-tended,multiple-spindle maehine. The mechanical tend-ing of the multiple-spindle machine was a nec-essary intermediate step, if for no other reasonthan that it required a lesser work-flow change,and eertainly a lesser conceptual leap for theeompanies and the maehine-tending workersinvolved.

For Jell-O, it is unhkely that vegetable flavorswould have been vei-y successful before the ideaof gelatin as a salad base had been pretty wellaecepted. Similarly, the promotion of eoloredand patterned Scotch tape as a gift and decora-tive seal might not have been as suceessful ifdepartment stores had not, as the result of theirdrive to compete more effeetively with mass mer-ehandisers by offering more customer services,previously demonstrated to the consumer whateould be done to wrap and decorate gifts.

3. Perhaps the most important benefit of en-gaging in advance, pre-introduction planning forsales-extendi)ig, viarket-stretching activities laterin the product's life is that this practice forcesa company to adopt a wider view of the natureof the product it is dealing with.

Indeed, it may even force the adoption of awider ieAV of the company's business. Take thecase of JelI-0. What is its product? Overthe years Jell-O has become the brand umbrellafor a wide range of dessert products, includingcornstarch-base puddings, pie fillings, and thenew "Whip'n Chill," a light dessert productsimilar to a Bavarian Creme or French Mousse.On the basis of these products, it might be saidthat the Jell-0 Division of Ceneral Foods is inthe "dessert technology" business.

In the case of tape, perhaps 3M has gone evenfurther in this technological approach to itsbusiness. It has a particular expertise (tech-nology) on which it has built a constantly ex-panding business. This expertise can be said tobe that of bonding things (adhesives in the caseof Scotch tape) to other things, particularlv tothin materials. Hence we see 3iM developing

scores of profitable items, including electronicrecording tape (bonding election sensitive ma-terials to tape), and "Thermo-Fax" duplicatingequipment and supplies (bonding heat reactivematerials to paper).

Conclusion

For Companies interested in continued growthand profits, successful new product strategyshould be viewed as a planned totality that looksahead over some years. For its own good, newproduct strategy should try to predict in somemeasure the likelihood, character, and timingof competitive and market events. While predic-tion is always hazardous and seldom very accur-ate, it is undoubtedly far better than not tryingto predict at all. In fact, every product strategyand every business decision inescapably involvesmaldng a prediction about the future, about themarket, and about competitors. To be moresystematically aware of the predictions one ismaking so that one acts on them in an offensiverather than a defensive or reactive fashion —this is the real virtue of preplanning for marketstretching and product life extension. The resultwill be a product strategy that includes some sortof plan for a timed sequence of conditionalmoves.

Even before entering the market developmentstage, the originator should make a judgmentregarding the probable length of the product'snormal life, taking into account the possibilitiesof expanding its uses and users. This judgmentwill also help determine many things — forexample, whether to price the product on askimming or a penetration basis, or what kindof relationship the company should developwith its resellers.

These considerations are important becauseat each stage in a product's life cycle each man-agement decision must consider the competitiverequirements of the next stage. Thus a decisionto establish a strong branding policy during themarket growth stage might help to insulatethe brand against strong price competition later;a decision to establish a policy of "protected"dealers in the market development stage mightfacilitate point-of-sale promotions during themarket growth state, and so on. In short, havinga clear idea of future product development pos-sibilities and market dcvclopnient opportunitiesshould reduce the likelihood of becoming locked

Prodzict Life Cycle 95

into forms of merchandising that might possiblyprove undesirable.

This kind of advance thinking about newproduct strategy helps management avoid otherpitfalls. For instance, advertising campaignsthat look successful from a short-term viev mayhurt in the next stage of the life cycle. Thus atthe outset Metrecal advertising used a strongmedical theme. Sales boomed until imitativecompetitors successfully emphasized fashionableslimness. Metrecal had projected itself as thedietary fô the overweight consumer, an imagrthat proved far less appealing than that of beingthe dietary for people who were fashion-smart.But Metrecal's original appeal had been so strongand so well made that it was a formidable tasklater on to change people's impressions aboutthe product. Obviously, with more careful long-range planning at the outset, a product's imagecan be more carefully positioned and advertis-ing can have more clearly defined objectives.

Recognizing the importance of an orderlyseries of steps in the introduction of sales-!.uild-ing "actions' for new products should be acentral ingredient of long-term product plan-ning. A carefully preplanned program for mar-ket expansion, even before a new product isintroduced, can have powerful virtues. Theestablishment of a rational plan for the futurecan also help to guide the direction and paceof the on-going technical research in support ofthe product. Although departures from sucha plan will surely have to be made to accom-modate unexpected events and revised judg-ments, the plan puts the company in a betterposition to make things happen rather thanconstantly having to react to things that arehappening.

It is important that the originator does notdelay this long-term planning until after theproduct's introduction. How the product shouldbe introduced and the many uses for which itmight be promoted at the outset should be afunction of a careful consideration of the op-timum sequenee of suggested product appealsand product uses. Consideration must tocus notjust on optimum things to do, but as importantlyon their optimum seqnence — for instance, whatthe order of use of various appeals should be andwhat the order of suggested product uses shouldbe. If Jell-O's first suggested use had been as; diet food, its chances of later making a big antieasy impact in the gelatin dessert market un-doubtedly would have been greatly diminished.

94 HBR Nov.-Dec. 196s.Similarly, if nylon hosiery had been promotedat the outset as a functional daytime-wear hos-iery, its ability to replace silk as the acceptablehigh-fashion hosiery would have been greatlydiminished.

To illustrate the virtue of pre-introductionplanning for a product's later life, suppose aeompany has developed a nonpatentable newproduct —. say, an ordinary kitchen salt shaker.Suppose that nobody now has any kind ofshaker. One might say, before launching it, that(1) it has a potential market of "" million house-hold, institutional, and commercial consumers,(2) in two years market maturity will set in,and (3) in one year profit margins will fall be-cause of the entry of' competition. Hence onemight lay out the following plan:

I. End of first year: expand market amongcurrent users

Ideas — new designs, such as sterling shak-er for formal use, "masculine" shaker forbarbecue use, antique shaker for "EarlyAmeriean" households, miniature shakerfor each table place setting, moisture-proofdesign for beach picnics.

II. End of second year: expand market to newusers

Ideas — designs for children, quaffer de-sign for beer drinkers in bars, design forsadists to rub salt into open wounds.

III. End of third year: find new usesIdeas — make identical product for use asa pepper shaker, as decorative garlic saltshaker, shaker for household scouring pow-der, shaker to sprinkle silicon dust onparts being machined in machine shops,and So forth.

This effort to prethink methods of reactivatinga flattening sales curve far in advance of itsbecoming flat enables product planners to assignpriorities to each task, and to plan future produc-tion expansion and capital and marketing re-quirements in a systematic fashion. It preventsone's trying to do too many things at once, resultsin priorities being determined rationally insteadof as accidental consequences of the timing ofnew ideas, and disciplines both the produet de-velopment efl'ort that is launched in support ofa product's growth and the marketing effort thatis required for its continued success.

TOWARD the end of the last century, nobody "wanted" an automobile. Whetherthe invention of the horseless buggy was due to accident, play, tinkering, orrational thinking on the part of people endowed with mechanical abilities is im-material for our purposes. Surely, die invention did not originate with the con-sumer and was not made with an eye to prevailing consumer wants. Even whenthe first cars appeared on the road and for many years thereafter, their use formass transportation was envisaged neither by producers nor by consumers. Buttoday even small children in America feel the need for a car to take them andiheii parents shopping, visiting, and later to school. Between the early days of theautomobile and the present situation there was a long period of social learning.The learning process was. of course, not spontaneous: first of all, it could not havetaken place without the original invention; second, it was a function of numerousstimuli — personal experience, education, and reading, as well as propaganda andadvertising. Thus it may be said that wants for automobiles were induced, or touse Galbraith's term, "contrived." But are not most of our wants contrived in thissense? And are not most of our contrived wants, in a certain sense, original withthe buyer? It can hardly be said that sueh want-creation is artificial.

• George Katona, The Mass Consumption Society• New York, MeGraw-Hifl Book Company, Inc., 1964, p. 55.

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