PLC, ILC and BLC.

This post will aim at comparing and finding similarities and dissimilarities between PLC (Product Life Cycle), BLC (Brand Life Cycle) and ILC (Industry Life Cycle) based on the following phases:

a. Introduction
b. Growth
c. Maturity
d. Decline

The "Life Cycle"s of either of these refer to the lifetime of each.

For a product, it would be the period from which the product was introduced to the point when it entered the phase where it was either taken off the grid or hit an all time low flat line wherein it has been just surviving without making much noise in the market.

For a Brand, it would mean that time from the when the brand was introduced in the market to the point where it went out of the market or turned into a non-entity due to various factors like inability to sustain, introduction of powerful competitors etc.

In case of an industry, it is the moment which a first mover realizes the potential in a product/service as a business idea and establishes it, later is successful in creating a market for this product and forces competition into the segment. When other players jump into the business after studying the results of the first mover, the singular business can be said to have morphed into a whole industry. It is very difficult to exactly pin-point when an Industry reaches its decline/end as most of the times, it undergoes some kind of an adaptation according to the requirement and the technological development of the current era. There are examples, however, these are specific to the technological evolution involved in the particular service/product. We can, however, based on available examples say that whenever all the BLCs and PLCs in an ILC enter their decline phase is when the industry enters a decline phase.

We can say that the PLC influences the BLC largely depending on the popularity and sales of the product. This in turn influences the ILC to a little or large extent depending on the same parameters. In terms of the graphical representation of the three cycles, the slope of the ILC is largely influenced by current movement in that market segment and the slopes of the Brands (which in turn are a result of the individual product slopes under the brand).


We shall briefly see how the 4 phases play out (what happens in) each of the life cycles.

PLC (Product Life Cycle):

Introduction:

Look after making the target group aware of the product and work towards developing a market for the product as it has been recently launched.

Work upon the belief factor towards a product of a customer.

Product may or may not have any customers.

Growth:

Focus on expanding the spread of the product.

Increase market share.

Grow into a competitive product.

Scope for achieving maximum hike in sales and profit.

Maturity:

Tackle competition.

Maximize profit.

Maintain the market share.

 Decline:

Add innovation.

Improve product by adding features.

Liquidate and sell off product if that is the option.

If there is a segment of buyers that will continue to buy this, keep offering this group the product if that is an option considering the financial conditions.

Slopes of individual players within a category essentially influence the curve of the overall growth graph of the industry.

Considering our Combo Meal, it would currently fall under the maturity phase as it has been there since a long time in the Mc'Donalds menu and has a long way to go before it even starts its decline phase!

BLC (Brand Life Cycle):

Introduction:

At this phase, the inception of the brand has been given a tangible form and the people involved would be actively building their offers and market.

At this point of time, the business may not have many or any customers but it has gone beyond an idea or a concept.

Growth:

In this stage, a brand might be at a point in which it is working towards a definite aim to establish itself in the market as a known name.

It might be that the demand for their offerings and services overpowers their ability to meet it.

Profits might be hard to come by given that advertising and marketing and meeting the demand would take up most of the available funds.

 Maturity:

This is the time when a brand fully well knows what it is doing and is working at full capacity.

They have attained a stability and have expected and constant profits.

They might be in a good position as far as profits are concerned but it might be that the growth and changes in offerings might have hit a flat curve.

Decline:

At its end, a brand would require to be either sold off or revamped. This would require a realistic valuation of the business.

The business at this point would be worth the real value of the brand in the current market place.

At this point, dealing with financial and psychological aspects of a business loss could be yet another concern.

This curve has a slope which is a result of individual slopes of the products contained under a brand. Hence, a rough summation of the product slopes (like in the graph for the PLC) will be very close to this graph (of BLC).

Mc'Donalds is already in the maturity phase. It has a long way to go to start its Decline given its deeply rooted position in the market. It has a legacy that most Brands cannot boast of and a very radical change in the industry or an extremely strong player coming in would have to be the change to even slightly displace Mc'Donalds from its position.

ILC (Industry Life Cycle):

 Embryonic (Introduction):

Vague definitions of products and the business types that will be included in the industry. The exactness of the product and business is relatively unclear.

The target group will not be very clear as to what is up to offers from the newly being formed industry.

Growth:

The industry might become more structured with a clear understanding of the kind and type of products that are being offered from it.

Business opportunities and (perhaps) different styles of doing business might emerge.

Proper channels of marketing might arise to facilitate the industry as understanding about the industry will gradually increase.

Maturityan (Maturity):

Industry is now fully established with all product categories that are related and are properly included in the Industry.

Old businesses will likely have hit their maturity or decline phases.

Newer players might have been introduced in the Industry and could be vying for a larger market share. Old players would likely be defending their market share by introducing newer strategies using which they would aim at keeping their product afloat.

Decline:

An ILC can be said to approach its end (probably) if and only if all the BLCs included in its scope have neared the end of their lives.

When talking about the Industry, what we are referring to is the Fast-Food joint industry. This is an industry which will change little. Evolution in the form of a change in the style of serving, transition to a more settled ambience and gradual and eventual price rises (inevitable). However, it is far from a decline.

ILC if taken in its broad meaning, we can hardly find examples of an actual Industry that has met its end. Even if the form of the industry has changed drastically in many cases, we have to say that the overall objective would still be catering to the same subject. For instance, we do not find films that are shot using cameras with rotating handles. However, in this case, we can neither say that the camera industry is dead nor can we say that the film industry has died out. Both have moved on to larger and better means of making objectives meet. However, a few examples I think (and I had mentioned in the beginning I would quote) come close to being classified as extinct Industry would be:

a. Soundless films

b. Letterpress printing

c. Zeppelin

d. Typewriter

e. Pager

Human requirements remain more or less constant. That might be the basic reason industries might not be dying. Example of trends in the gaming industry-transition from computer owners to cyber café gaming (not very accessible for certain income groups) to LAN gaming-to advent of gaming consoles to another target group now adopting and sustaining the LAN gaming industry.

Another example would be the evolution of storage devices used in computing, from punch cards-magnetic tapes-floppy disks-CDs-DVDs-Universal Serial Buses and now we are at a point where we depend (knowingly or unknowingly) largely on online storage in the form of Cloud.

More or less, the factors influencing either of the graphs of PLC, BLC and ILC would be types of customers, their immediate needs and willingness to accept change or otherwise. The following table tries to review the diffusion of innovation and types of customers and what influences their behaviors during changing over to newer customs in case of a product.

	Resources
Risk taking ability		High	Low
	High	Innovators, Early adopters	Early Majority
	Low	Late Majority	Laggards

We can clearly see that high risk takers are the ones to jump over to new products while it takes time for majority of the buyers to develop trust in them.

As we come to what we can call a conclusion, we can say that the PLC, BLC and ILC are highly interdependent, not only in terms of their lifetimes but they also influence each other depending on how well a particular cycle is faring in its current phase.

Life cycle time period-PLC, ILC and BLC have different time periods for which they last. PLC and BLC may (or may not) outlast each other. It may often be that the BLC outlasts the PLC though a Product may sometimes outlast a Business.

ILC on the other hand would indicate the entire industry to which the product and business belong. Therefore, unless every business in an industry shuts down, the ILC will not complete. On the other hand, end of the ILC would indicate the end of all the BLCs and PLCs which directly fall in the Industry’s paradigm.

Until the next post, Ameya S S signing off.

P.S.

If you are planning to go to some other fast food place thinking of trying to bring down the market share of Mc'Donalds-all the best! If you are not-doesn't make a difference really. They are cemented in well, perhaps even ready for lasting an impending apocalypse (and making great business in the crisis time selling burgers and fries!).