Factors affecting the life cycle of a product: there are many factors that affect the life cycle of a product. Statement of Joe Dean is very important in this regard. He said, "the length of a product life cycle is governed by the rate of technical change, the rate of market acceptance, and the ease of competitive, entry." Some of the important factors affecting the life cycle of a product are as follows:
1. Rate of technical change: life cycle of a product is affected by the rate of change technical change the country. If the rate of technical change in the country is very high, the life of the products limited because new and improved products take place of old and the existing products. On the other hand, if the rate of change is not so high, the life of the product in that country may be longer. For example, the life cycle of products in India (where rate of technical change is not so high) is longer as compared to the life cycle of products in developed countries (where technical change is a higher rate).
2. Rate of man at acceptance: the rate of customer also affects the life cycle of the products. If the rate of market acceptance is high, the life cycle of products in that country is limited. It is because the customers who have accepted the new products will soon stand out of the market. Similarly, if the customers accept the product at a slow rate, the life cycle of the of the products may be quite long. For example, in India, the market acceptance is very slow, and therefore, here life of the products is very long.
3. Ease of competitive entry: the situation of competition in the market also affects the life cycle of the products. If the entries of competitions are easy and unchecked, the life of the products will be shorter as the new products will enter the market. As a result the existing products will be influenced out of the market. Country, if the entry of competitions is not so easy the life cycle of the products will be longer.
4. Risk bearing capacity: the risk bearing capacity of the enterprises also decides the life cycle of its products. If the enterprises have risk bearing capacity, they can keep their product alive in the market for a long period as they can face the challenges of the market very effectively. For example, they can spend more amounts on the advertising and sales promotion to meet the competition in the market. But where the enterprises have no risk bearing capacity may fail to face the challenges of the market. They will soon with- drawn their products from the market. If they smell heavy risk. In such cases, the life cycle of their products will be shorter.
5. Economic and managerial forces: enterprises having strong economic and managerial forces, can keep their products standing in the marketing and the life cycle of their product will be longer that of the life cycle of the products of those enterprises having weak economic and managerial base.
6. Protection of patents: the life cycle of the products is fairly long if their patents have got registered. On the other hand, if the products are not patented their life is out short.
7. Goodwill of the enterprises: if the goodwill of the enterprise is good in the market as the producer of goods quality products, its product will last long in the market as compared to the products of those enterprises whose goodwill is not good or which are not known to the public much.