Do brands have Finite life

Answer 1

The product life cycle, or PLC for short, is one of the best-known marketing concepts on the planet. First referenced in the 1920s by economists reporting on the automobile industry, the term applies Biology to all manner of brands, makes, and models of packaged goods, cars, magazines, electronics-really any product imaginable-charting each as it passes from birth to growth, growth to maturity, maturity to decline, and ultimately to death. Yet while it's universally known, it's not unanimously accepted. In fact, many (us included) think it's downright absurd to try to draw a kinship between living things, which have a genetically predetermined, uncontrollable course of development and life expectancy, to products, services, and, in particular, brands, who's "life" is completely in the hands of its management and competitors. Unlike living things, there are no statistics published on the average life of brands, in general or by category. Given that the vast majority of new products and services don't make it to their third birthday (yet others live to well over 100), we estimate the average life expectancy is 13 years, about the same as lions and tigers. But this number is really meaningless because brands do not necessarily have a finite end.Well-managed, a brand could live forever. American Express, Budweiser, Camel, Coca-Cola, Gillette, Western Union, and Wells-Fargo, for instance, are still going strong in their respective categories after 100+ years. Even if a brand dies (figuratively because management cuts off life-support or literally going out of business), it can rise again, though perhaps in more limited distribution. Take Pabst Blue Ribbon and PanAm Airlines. PLC often trips up marketers because of the concept's basic premise that products require different strategies at different stages of the life cycle. To apply PLC, practitioners explain, all marketers need do is plot where their brand is on the PLC continuum and follow the prescribed strategies to maximize profits at that stage. For example, during the growth stage, action plans include improving the -quality of a product or adding more features; entering new market segments; or increasing distribution. At the decline stage, action plans include cutting prices and reducing marketing budgets. Sounds nice and easy, but understand that researchers have identified at least 17-that's 17-different PLC patterns. There's the growth-slump-maturity pattern, the cycle-recycle pattern, the classic S-curve, and on and on. How is a marketer supposed to know what pattern fits his or her brand? If you don't know what PLC pattern applies, how does a marketer know that his or her brand is in decline, and, should therefore take the prescribed action of cutting marketing budgets? Maybe the brand is experiencing just a slight decline before a dramatic increase in another growth period, or maybe it's a leveling off of sales with no more peaks and valleys, just perpetual maturity. Cut the budget and the brand heads into a downward spiral, whether it was really headed in that direction to begin with or not. And that's a dangerous and costly mistake to make. There's just no way for a marketer to know what PLC pattern applies, nor is there a scientific way to measure and pinpoint an exact location in a life cycle. There's no way to know because the pattern is as much a function of academic researchers attaching a label to a random phenomenon as it is a serious taxonomic classification of a real underlying pattern. Also bear in mind that the recommended actions at each stage are based

purely on observations and anecdotes of what other companies have done.

There's nothing proprietary about it; it may or may not be relevant for a particular brand; and it certainly isn't directly linked to increasing profitability. As Nariman Dhalla and Sonia Yuseph wrote in the Harvard Business Review nearly 30 years ago, "the PLC is a dependent variable which is determined by marketing actions; it is not an independent variable to which companies should adapt their marketing programs." While the movement against PLC has existed for years, it wasn't until

fairly recently that another option for assessing and quantifying the

health of a brand to determine if it's on its last legs or still going

strong became available, one that is scientifically grounded and actually useful for marketers. Customer equity-in the simplest terms, the lifetime value of all of a brand's customers-is a much more predictive measure of how much longer a brand is likely to live if the company maintains the status quo. (For more on the topic read the award-winning Driving Customer Equity by Rust, Lemon,and Zeithaml on which we base much of our own customer equity work.) The

more equity a brand has, relative to its competitors, the longer it will live irrespective of its chronological age. It's also a much more

prescriptive tool; if a brand has weak equity, its managers know they need some serious transformational marketing medicine to make it healthy again and prolong its life. While there is nothing you can do to make a dog live to age 75, there are many things you can do to double the life expectancy of a brand. The first thing is stop using the antiquated, unhelpful, and we'd add hazardous product life cycle concept.