Managing product life-cycle in the auto industry: evaluating carmakers effectiveness
AbstractThe article analyzes the evolution of product life-cycle policies of main carmakers in the three main European markets (Germany, Italy and France). Sales data regarding 212 models of 13 major carmakers are taken into consideration for the period 1970-2006. A sub-sample including more detailed data (sales and features) of 125 car models along the period 1984-2005 has been investigated with the aim of evaluating effectiveness of product innovation and product line extension. The aim of the study is to describe product replacement policies and timing pursued by carmakers within each segment and to evaluate the effectiveness of carmakers PLC policies through inter-brand comparison. According to our results, PLC is getting dramatically shorter, but the reduction does not apply to maturity and saturation phases. Generally speaking, companies seem not effective in timing for new products, with few exceptions. Moreover, carmakers tend to support sales with a policy of product line extension, while no evidence of effectiveness of such policies emerges. Product innovation seems related to increase in sales, although the introduction of new models and versions is generally delayed with respect to the optimal life-cycle timing. Results from this exploratory research are used to fromulate hypotheses to be verified in further research based on more detailed data.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29381.
Date of creation: Jun 2008
Date of revision:
Product Life Cycle; Automotive Industry; Product Policy; Competitive Analysis;
Find related papers by JEL classification:
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Polli, Rolando & Cook, Victor, 1969. "Validity of the Product Life Cycle," The Journal of Business, University of Chicago Press, vol. 42(4), pages 385-400, October.
- William E. Cox & Jr., 1967. "Product Life Cycles as Marketing Models," The Journal of Business, University of Chicago Press, vol. 40, pages 375.
- Volpato, Giuseppe & Stocchetti, Andrea, 2009. "Old and new approaches to marketing. The quest of their epistemological roots," MPRA Paper 30841, University Library of Munich, Germany.
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