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Steven Chen, CSUF Mihaylo College of Bus/Econ  

Click here for Steven Chen's Bio

Wednesday, March 04, 2009
The age of design
Tuesday, April 28, 2009
The O.C. design corridor
Design and the product life cycle
A staple of Marketing 101 is the product life cycle, or PLC, theory, which teaches us how to manage the sale of a product over time.

PLC theory divides product lifespan into four phases – introduction, growth, maturity and decline. The theory defines each phase in terms of sales, costs, profits, customer type, competitor behavior and marketing objectives. For each phase, PLC theory also outlines the appropriate marketing mix strategies that lead to success.

What is the relationship between design and PLC theory? How does design impact the marketing mix strategies for a product? The answers are not in any textbook.

1. Design can bump up the sales curve for growing and mature products. PLC theory tells us that the objective of products in the growth and maturity phases is to capture market share and maximize profits, respectively. One way to do this is to offer more diversity of products based on different features of the product line.

Customers for products at the growth and maturity phases are early adopters and the middle majority. To tap this diverse taste market, firms could provide multiple variants of products. One way is through design – different product colors and shapes.

A real-world example is the iPod Nano. The fourth generation Nano debuted in November, but as a product concept, Nano has been around since 2005. It is the epitome of the growing-mature product. When Nano first launched, it was offered in only two colors. Six colors were offered to customers in the second and third generations. Currently there are eight “nano-chromatic” colors.

2. Design gives new life to declining products. How can firms create new demand for an old product?

? Find new customer segments for the same product.
? Find new uses for the same product.

Some firms do it by redesigning declining products. Nowhere is this more transparent than in the automotive industry, where declining car models receive a mid-cycle refresh.

An example is the seventh-generation Toyota Camry, aka XV40, which was introduced in 2006. The XV40 is now in the middle of the Camry’s five-year model lifespan, and sales are no longer as robust as the debut year. At the 2009 North American International Auto Show, Toyota revealed a redesigned seventh-generation 2010 Camry. Changes include a new front fascia, redesigned headlights and taillights, new rim designs, new engine options and different audio system options.

The lesson here is that design can briefly rejuvenate sales of products by changing consumers’ perceptions of old versus new.

3. Innovative, iconic designs can extend product lifespan. Increasing competition has put additional pressure on firms to generate new products at a quicker rate. This means that firms have to continuously throw money at research and development. This breakneck pace can be debilitating and exhaustive. However, firms can alleviate this pressure by creating long-lasting products through innovative design. It sounds difficult, but it can be done, albeit with a lot of investment in the design department.

Consider Volkswagen’s new Beetle. Save for the annual cosmetic upgrades, the design has remained unchanged since its debut over a decade ago!
Why is it so durable? It has an iconic design that’s non-substitutable and so patently unique that any imitation would be a blatant Xerox copy job. Non-substitutable design gives a product more breathing room because the competition effects – at least on the design dimension – are fewer. The new Beetle has juiced every cent out of its design.

The lesson here is that managers could put more money in research and development, and initial design, to create iconic designs that are durable.