Product Develompent Cycle

Product Life Cycle

The product category chosen for the purpose of discussion in this paper is the domestic airline industry in the United States, which is in the mature stage of its product life cycle. The fact that the domestic airline industry in the U.S. is in the maturity stage is evident when the category is traced through the various stages of the product life cycle: "...the Product Life Cycle (PLC) is based upon the biological life cycle... A seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins...to die." (Marketing Teacher)

The aviation industry was born in the early twentieth century when aircraft technology was first developed by the Wright brothers in the United States leading to the use of aircrafts in World War I, with European leaders investing heavily in the new technology. The industry remained in the introductory stage till the 1940s since limited aircraft were available for commercial use, and the technology to ensure passenger safety and comfort was still being developed (AIAA; Marketing Teacher). The industry entered a growth stage only in the post World War II era with the establishment of well-traveled air routes around the globe, experienced aviators, proven equipment, and experience in managing air traffic. Thus, by 1950 the airliner was positioned to replace sea and rail travel, which led to the entry of new competitors in the form of regional and national domestic airlines (AIAA).

The domestic airline industry in the U.S. enjoyed a long period of growth since it was heavily regulated by the government, including the routes and schedules an airline could fly. Such regulation limited the number of competitors allowing the existing players to build strong brands, market shares, and profits. However, once the industry was deregulated in 1978, it quickly entered the maturity phase as evidenced by the entry of several new competitors with undifferentiated product and service offerings. Deregulation resulted in the building of over capacity, which led to intense price wars and competition and many airlines exiting the industry due to poor margins and subsequent losses. In fact, there have been 120 airline bankruptcies since deregulation (Freiberg, p. 4-5).

The fact that the U.S. domestic airline industry is in the maturity stage is also evident by the fact that airline carriers are attempting to differentiate their brands through product innovations, more frequent services, more destinations, more comfortable seating, as well as lower prices (Times 100). Other promotional measures used by airline carriers to promote their brand include features such as frequent flier programs that are designed to build customer loyalty and maintain market share (Times 100). In fact, such value additions to entice customers are being offered by low-cost carriers such as Southwest as well, even though such airlines primarily depend on their low fares to build market share.