- Impact of External Forces – The PLC assumes customers’ decisions are primarily impacted by the marketing activities of the companies selling in the market. In fact, as we discussed in the Managing External Forces Tutorial, there are many other factors affecting a market, which are not controlled by marketers. Such factors (e.g., social changes, technological innovation) can lead to changes in market demand at rates that are much more rapid than would occur if only an organization’s marketing decisions were being changed (i.e., if everything was held constant except for company’s marketing decisions).
- Use for Forecasting – The impact of external forces may create challenges in using the PLC as a forecasting tool. For instance, market factors not directly associated with the marketing activities of market competitors, such as economic conditions, may have a greater impact on reducing demand than customers’ interest in the product. Consequently, what may be forecast as a decline in the market, signaling a move to the Maturity stage, may be the result of declining economic conditions and not a decline in customers’ interest in the product. In fact, it is likely demand for the product will recover to growth levels once economic conditions improve. If a marketer follows the strict guidance of the PLC he/she would conclude that strategies should shift to those of the Maturity stage. Doing so may be an overreaction that could hurt market position and profitability.
- Stages Not Seamlessly Connected – Some high-tech marketers question whether one stage of the PLC naturally will follow another stage. In particular, technology consultant Geoffrey Moore suggests that for high-tech products targeted to business customers, a noticeable space or “chasm” occurs between the Introduction and Growth stages that can only be overcome by significantly altering marketing strategy beyond what is suggested by the PLC.
While not perfect, the PLC is a marketing tool that should be well understood by marketers since its underlying message, that markets are dynamic, supports the need for frequent marketing planning. Also, for many markets the principles presented by the PLC will, in fact, prove to be very much representative of the conditions they will face in the market.
Finally, the PLC is just one of many models that can assist marketers as they are engaged in the planning process. Most are beyond the scope of this tutorial. For those interested in learning more about these models, you are encouraged to consult one or more of the many excellent Marketing Strategy textbooks or trade books.