Product life cycle and logistics — sound familiar? As a business leader, you are probably very familiar with those terms.
Bear with me for a moment and consider that life cycle and logistics are the same topics the caretakers at the Monterey Bay Aquarium fret about. For example, their current special exhibit, “Tentacles: The Astounding Lives of Octopuses, Squid and Cuttlefishes,” has long been in the planning stages due to logistical and life cycle challenges presented by the species themselves.
“Their lifespan might be measured in months, not in years,” says Ken Peterson, the aquarium’s communications director. “They’re not easy to transport from where they are found in the wild, so you have to think about raising them.”
Undaunted, the aquarium husbandry staff took on the task of figuring out how to raise the creatures. Fortunately, octopuses can lay hundreds or thousands of eggs at a time.
But back to my analogy with the business world …
There are four stages in octopus growth akin to business growth: introduction, growth, maturity and decline. Each deserves “care and feeding” in order for the product to reach the next stage. While not all products go through each phase, it’s easy to see that there are identifiable stages along the way. Get my point?
Things can be going along swimmingly, but if and when your product reaches the decline stage, it’s time to rethink your plan. At that time, consumers have either purchased enough of the product that there is little demand or another product has cut into sales. Either way, you might decide that it’s time to take your product off the market.
What’s your plan when sales start to decline? Will you try to increase sales during this period by cutting your costs to reduce your spending? Will you try another strategy to continue to be competitive?
A number of years ago, Arm & Hammer saw a decline in baking soda sales and worked to find other uses for its product. Instead of leaning on its past as a baking ingredient, it promoted baking soda as a deodorizer for refrigerators, a laundry additive, a toothpaste additive and a carpet freshener. These new uses extended the life cycle of the baking soda business.
But don’t overlook international expansion. When product demand starts to decline, an expansion into other geographic regions is often an effective response. Think of Wal-Mart, Best Buy and most automakers.
Not only does an international expansion mean more sales, it gives companies access to more growth opportunities, as well as access to a world of new perspectives, new ideas and new talent.
This all means that product life cycle is an undeniable concept. It helps managers better understand sales growth and change over time. Products, countries and museum exhibits have it.
Be sure to catch this month’s Uniquely Northern California feature on the Monterey Bay Aquarium. It’s a real attention grabber.