Introduction
Product life cycle is an important aspect that shows the stages and the sequence of the product in the market. In that regard, every product has a particular life cycle, which advantages might go beyond positioning the product’s position in the market and predict its destination. One of the most important advantages of the concept of life cycle can be seen in the sphere of marketing, where if used as a tool it allows adjusting the strategies, including marketing, based on the known or the predicted stages of the product life cycle. Following the aforementioned, this paper analyzes the importance of the product’s life cycle as a marketing tool, in the field of video game industry, specifically companies such as Sony Computer Entertainment, and Microsoft.
Literature Review
The product’s life cycle usually consists of four main stages, i.e. introduction, growth, maturity and decline. Accordingly, the duration of the cycle, although can be predicted, it can be influenced by external factor that shortens or extend that period. The role of marketing, in that regard, is changing the technique according to each stage of the marketing to adjust to the challenges and the opportunities of each stage (2007). Thus, by monitoring and controlling the product’s life cycle line or curve, the company can have important insights about each stage, and the marketing adjusting its position according to such insights.
Research
The industry of video consoles is a specific sphere where marketing and the life cycle of the product, game consoles are closely interrelated. Considering the aforementioned companies, there are examples in each of the company’s products that demonstrate the implementation of the concept of the product life cycle. Taking the example of Microsoft with their previously released console Xbox in 2001, and the successor in 2005, the life cycle was less than four years. Considering that, “Video game consoles and software move from the introduction stage to the maturity stage in five years”(Kerin et al., 2003), it can be seen that the decision to drop the product and switch to the next was based on the early decline stage. Thus, the marketing department saved the marketing costs of continuing Xbox promotion, and introduced the new one earlier than their competitors.
A different approach can be seen in the example of Sony Entertainment System, where their console Play Station 2 was released in 2000, and the successor Play Station 3 in 2006. The company prolonged the maturity stage of their first console by differentiating their console and releasing a cheaper and slimmer version, and encouraging customers to switch to their offering. Thus, the company acknowledged the timing when the products exceeds the demand, and thus offered basically the same product in a new shell and with reduced price to attract new buyers. Even with a newer console out in the market, the old product is still selling well and offering new looks. In that regard, marketing could use the product life cycle to mix the products, plan the next release, and adjust the curve of the product to delay the decline stage.
Conclusion
It can be concluded through the provided examples that using the product’s life cycle, the company can adjust its marketing processes to either shorten the life cycle and switch to another product, or maximize the profit from the existent product and delay its decline. Nevertheless, the advantages are not limited to such purposes, where additionally, product’s life cycle can help the company to time their marketing campaigns to achieve maximal results.
References
- (2005) Shortages spoil Xbox 360 launch. BBC. Web.
- (2006) PlayStation 3 sells out at launch. BBC. Web.
- (2007) The Product Life Cycle. Net MBA. Web.
- COLLINS, D. (2009) The advantages of the product life cycle concept. Dave Talks.
- IGO (2002) Xbox Retrospective: All-Time Top Xbox News. Gamer 2.0. Web.
- KERIN, R. A., HARTLEY, S. W. & RUDELIUS, W. (2003) Marketing : the core. McGraw-Hill/Irwin series in marketing. McGraw-Hill/Irwin.
- SCEJ (2007) PLAYSTATION®2 (SCPH-90000 SERIES) COMES IN A NEW DESIGN. SCEJ.