Life Cycle Concepts

Life cycle refers to the chain of events that comprise of a beginning, maturing and demise of an entity that follows such a pattern.

Life cycle concepts can be applied to various levels of organizations.
Thus we have:

• Product life cycle: The period of time over which an item is developed, brought to market and eventually removed from the market. First, the idea for a product undergoes research and development. If the idea is determined to be feasible and potentially profitable, the product will be produced, marketed and rolled out. Assuming the product becomes successful, its production will grow until the product becomes widely available. Eventually, demand for the product will decline and it will become obsolete.
• Brand life cycle: The possible change in associations that a brand has to an array of different products over time. It results from diversification or migrating to a new area of specialization altogether.
• Industry life cycle: A concept relating to the different stages an industry will go through, from the first product entry to its eventual decline.

We shall focus on product life cycle (PLC). PLC generally comprises of the following distinct stages:

• Introduction
• Growth
• Maturity
• Decline

The following chart represents the revenue vs time relationship with the four stages clearly demarcated:

Cigarettes do not follow the normal product life cycle curve. 

Theoretically speaking, cigarettes are addictive in nature and thus there should be no no question of the decline of cigarettes. Unless cigarettes are heavily taxed and cigarette consumption is heavily penalized, cigarette consumption will continue to grow. However global consumption of cigarettes has declined with the anti-smoking programmes across the world and the vilification of cigarettes and smoking across the world. The CAGR for cigarette consumption across the world has show signs of slowing down. 

The world has literally gone from:

 

to 

The cigarette industry on the other hand follows an S-curve. The cumulative consumption of cigarettes shows no signs of receding. People who smoke a particular brand usually stick to that brand till either they quit for good or they die.