Over the years I have come to realize that a lot of things that we take for granted are actually incorrect. Whether it is music or food or business, many of the things we just assume to be “the way things are” just ain’t so. One of my favorite examples of something that is “common knowledge” and absolutely wrong is the product lifecycle (PLC) concept, as generally understood.
The idea of a product lifecycle was first discussed in the early 1950s, and later in that decade some research was done to try to measure it. Since then it is taught in every basic marketing course and most marketers simply accept not only the concept but the general rules about innovators and early adopters and the growth, maturity, and decline phases of the lifecycle—often to the point of believing that X% of the market exists at each of the stages. But what is the proof of this “cycle?” You may not know this, but the general rules for this model are based on a study of the adoption of hybrid seed corn by farmers in Iowa in the late 1950s. From that one study, all the generalizations about the PLC have been developed, and swallowed without question. So, how well does the adoption of seed corn fit with the adoption of your medicine?
Beyond the problem with trying to broadly apply the results of one study done on corn in Iowa 60 years ago, the use of the PLC concept has some other problems—the biggest of which is simply the definition of the word “product.” When considering the adoption of a new product, the PLC is not tracing the sales of a new brand, it is tracking the adoption of a new technology—vastly different from what most people think. We will take these points on separately.
Product adoption is not the same thing as sales. The concept of the PLC is to track the number of new customers adopting the product, not the number of units sold. For prescription drugs, tracking the TRx count doesn’t help you to understand where your product is in the lifecycle, which is also why no single drug ever had a lifecycle curve that looked like the pretty ones in the books. If you tally up the number of prescribers of your drug over time you are getting closer to what the PLC measures. That is also why you could have sales increasing rapidly for a “mature” product (when the PLC is supposed to be flat). It simply means that your customers are prescribing more of the product—not new customers (prescribers) but users (patients).
The most important misconception about the PLC is the difference between what the “product” is and what people think it is. The PLC is not about a brand, it is about a technology, or a new way of dealing with a problem. For example, Prozac did not have a lifecycle curve as we know it, but if you put together the adoption of all SSRIs (and SNRIs and other similar agents) you would see a curve that looks remarkably like the classic curve in the books. The same would go for any category of drugs—the PLC traces the adoption of a drug class (a new “technology”)—not a drug brand.
A new technology represents a discontinuity in the way a customer need is met, not just an improvement over the previous way. For example, when the calculator displaced the slide rule that was a discontinuity, and even though the calculators of today look a lot different than the ones available in the late 1960s, they are really the same technology. It is very important to understand that not all drug classes will be seen as “new” in the sense that we are talking about a new technology. One could argue that the Angiotensin II Reuptake Blockers (ARBs) may be seen as basic improvements over the previous technology of Angiotensin Converting Enzyme Inhibitors (ACE Inhibitors), while the SSRIs represented a major difference from the older Tricyclic antidepressants—a discontinuity.
Your Job as a Marketer
So, how does this affect your world? First, stop even thinking about lifecycles as they relate to your brand—the concept wasn’t designed (or conceived) for that—but instead, use them to understand where your brand fits into the market as it is developing. If you are about to launch the first drug in a new category that treats a disease in a very different way, you are probably kicking off a new PLC and your first users will be the innovators and early adopters. You will need to help them understand why your product’s way of treating the disease is better. If your new product isn’t a breakthrough—even if it is far superior to anything in the market—you are entering the PLC at a different stage—not “Introduction.” Your customers aren’t “Innovators” and may not even be “early adopters” even if they are the very first to prescribe your drug. They, like the others using competitive products, are already comfortable with what your drug does. They don’t need to learn about it from the ground up.
The value of the PLC is not in understanding your product, but in understanding the market. When you know what stage of the technology lifecycle your product is in, you will be able to better tailor your marketing efforts to address the market.