To appreciate this topic more broadly, it is important to consider that it can be handled from both the marketing and the environmental point of view, so it will be discussed from both aspects, where the environmental will be of utmost importance for this work.
Today, environmental impacts are increasingly controlled by organizations, so knowing the magnitude and type of impact they could cause is the first step to avoid or reduce them.
In order to carry out this type of study, a technique known as Life Cycle Analysis is used, which is a methodology that allows the collection and evaluation of inputs, outputs and, above all, the potential impacts that a product has during its Lifecycle.
Also as a complementary part to this article, the life cycle analysis of a product is included from the marketing point of view, which is also important and useful in the area of knowledge of the administration.
PRODUCT CONCEPT
A product is a set of tangible (shape, size, color) and intangible (brand, company image, service) characteristics and attributes that the buyer accepts, in principle, as something that will satisfy their needs.
Therefore, in marketing a product does not exist until it responds to a need, a desire. The current trend is for the service idea to increasingly accompany the product, as a means of achieving better market penetration and being highly competitive. (Muñiz, sf)
DEFINITION OF THE LIFE CYCLE OF A PRODUCT
According to marketing, the life cycle of a product is a concept of great importance in the process of its commercialization, since the existence of competing products, the behavior of the market and the situation of the environment change over time during this whole process.
The analysis of the life cycle of a product and all its characteristics should therefore allow designing an adequate marketing policy for each product and market.
The life cycle of a product is a chronological process that goes from its launch on the market to its disappearance. (Godás, 2006)
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Life cycle analysis can be a powerful tool for developing business strategies and a platform to establish clearer communication with clients and other stakeholders; and, when used properly, it can guide the company that employs it to improve its financial results thanks to the vast information generated as a result of the same analysis.
This tool, according to the United States Environmental Protection Agency, aims to help the company understand the potential impacts that its products may have on the environment and society from a comprehensive point of view, covering from extraction of the raw material, the manufacturing process, the distribution of the product, its use, reuse and final disposal. (ExpokNews, 2013)
MARKETING APPROACH
Phases of the product life cycle
The product is the most important element for a company and largely determines its existence. That is why companies try to systematize the behavior of sales of their products through their permanence in the market. Not all products remain during the same period and even the vast majority do not experience the same fluctuations in sales, nor the same situation in terms of prices, advertising and marketing. The life of each product evolves differently, but following a cycle that is identical, its life cycle. The phases that make up this life cycle are as follows:
- Introduction. Increase. M to Durez. Slope. Disappearance.
Market introduction or development phase
It is the starting point in the commercial life of a product and begins with its launch on the market. It is a critical stage, as the statistics show: between 50 and 70% of the products fail in their market launch phase. As it is an initial period, both sales and profits are low. In turn, due to its novelty, consumer ignorance of the product is high and there are usually no competing products. It is a stage whose duration is directly related to the characteristics of the product, its complexity, degree of novelty and ability to satisfy consumer needs.
Growth phase
After the introduction of the product, the growth phase begins. This period is characterized by a rapid increase in both sales and profits. Attracted by the novelty, the first competitors appear, reason why the competition intensifies, increasing therefore the number of points of sale and the new distribution channels. The number of buyers also increases, attracted both by the novelty and by the advertising made. With the increase in sales, new versions of the product appear and its benefits improve. Investment in advertising is high and attempts are being made to attract new buyers.
Maturity phase
Once the growth phase is complete, the maturity phase begins. This stage is characterized by moderate growth in sales, and even stabilization, while stagnation occurs first and a decline after profits. Demand is produced by product replacement or by extension through the appearance of product families. This is a consequence of the greater difficulty in placing the product on the market and the increasing pressure from competitors. The differences between products are few. The maturity phase is a longer stage of the product life cycle, and most products on the market are in this phase.
Decline phase
- The decline phase is the stage prior to the disappearance of the product from the market. Sales are decreasing and profits are tending to disappear. Production is concentrated in few companies, which offer a smaller variety of products, causing the industry to decrease. Prices that had started to decline tend to stabilize and may even go up if the supply of the competitors decreases.
Disappearance phase
It is the final stage of the product life cycle. Given the continuous decreases in sales and the negative results, it was decided to withdraw the product from the market. The decision to withdraw a product from the market depends largely on the possibilities of substituting it with a more profitable one, on redesigning the product itself, on finding new uses for the product, on attracting new consumers or on the disappearance or coexistence of competitors. (Godás, 2006)
Product Life Cycle. Source: The product life cycle. Godás, Luis.
Placing the products in their phase is, without a doubt, a previous and indispensable step to guide the company's marketing policy. Thus, for example, it would be absurd to make a great effort to reduce the cost of a product in the growth phase, when in fact the efforts must be directed to activate and attract towards itself an increasing demand. Although this analysis is highly useful from a conceptual point of view, the main drawback that arises when trying to apply it to a specific product is the great difficulty in locating it in its corresponding phase of life. The reasons are mainly based on:
- The interdisciplinary nature of marketing. The duration of the phases is highly variable. It is frequent that the products in their last stages do not follow a downward path towards decline, but rather fluctuations due to technical innovations that are incorporated into them. some products (mainly seasonal ones) the process that goes from the first to the last phase is very fast, so that an annual analysis of this type is not useful. (Muñiz, sf)
ENVIRONMENTAL APPROACH
Life cycle analysis
The concept of the life cycle proposes to globally visualize the impact on the environment of the different stages through which the products, processes or activities of our society pass, that is, from the extraction of the raw materials necessary for their manufacture to his end of life stage. (Responsible Buying Guide, nd)
Life cycle analysis (LCA) is a methodological framework for estimating and evaluating the environmental impacts attributable to the life cycle of a product.
Life cycle of a product. Source: ECOIL
All activities or processes cause environmental impacts, involve consumption of resources, emit substances into the environment and generate other environmental modifications during their life span.
Commonly valued environmental impacts include climate change, depletion of the ozone layer, ozone generation in the troposphere, eutrophication, acidification, and many others.
The stroke tool is relatively modern, since it was developed in the 1960s and is used to prevent pollution in the 1970s. Consequently, there are no specific procedures or guidelines to follow, but there are a number of approaches that can be useful in function of the need to be resolved through the LCA.
The basic principle of the tool is the identification and description of all stages of the product life cycle, from the extraction and pre-treatment of raw materials, the production, distribution and use of the final product to its possible reuse, recycling or product disposal. (ECOIL, sf)
Stages of the Product Life Cycle
The Life Cycle Analysis (LCA) is a methodological tool that serves to measure the environmental impact of a product, process or system throughout its entire life cycle (from when raw materials are obtained until their end of life).
It is based on the compilation and analysis of the inputs and outputs of the system to obtain results that show their potential environmental impacts, with the aim of determining strategies to reduce them.
The tool allows an analysis by quantifying the use of resources ("inputs" such as energy, raw materials, water) and environmental emissions ("outputs" to air, water, and soil) associated with the system being evaluated according to the phases that comprise it, such as the extraction and obtaining of the raw materials necessary to manufacture it, factory production, use and / or consumption, transport and distribution and, finally, final disposal of the product itself. This type of life cycle is commonly called "from the cradle to the grave." (Argentine Industry / Environment Unit, nd)
Stages of the life cycle of a product. Source:
The life of a product is made up of different stages:
- Extraction and processing of raw materials
Raw materials are materials extracted from nature that are used to build consumer goods, being their plant, animal or mineral origin.
The main environmental impacts in the stage of extraction of raw materials for the elaboration of a product are related to the energy consumption associated with this extraction process, the degradation and erosion of the land, the emissions of polluting gases, the emissions of greenhouse effect and soil or water pollutants. Other factors to take into account in the raw material extraction stage are their dangerousness and toxicity.
- Product manufacturing and manufacturing
In the manufacturing phase, the environmental impact is mainly due to the energy required to manufacture the product and the generation of waste associated with the manufacturing process.
Raw materials are transformed into materials suitable for use in the manufacture of products.
The industry generates a large amount of waste, many of which are recoverable. The main problem lies in the fact that on many occasions it is not financially worth doing.
- Packaging and distribution
After the stage of extraction of raw materials and manufacture of the product, the packaging and / or packaging of the product is carried out for subsequent distribution. However, there is another "virtual" stage prior to all of them whose importance should not go unnoticed. This stage is the product design stage. A key element in the design is the packaging that this product will have.
An attractive design of the container does not have to be opposed to an efficient design (from the point of view of consumption of resources and energy). A reduced or low weight and volume packaging can lead to an optimization of the distribution of the product since, for example, the number of products transported in the same truck can be increased with an improvement in the packaging.
This strategy of integrating environmental aspects into product design in order to improve its environmental performance throughout its life cycle is called ecodesign.
- Use and maintenance
The use and maintenance phase involves high energy consumption and associated resources, as this phase ranges from the electrical energy consumed by the product if required, to the transport of a repair or maintenance.
- End of life
The end of life stage of the products has different possibilities depending on the nature of the waste components and the region in which they are treated.
Waste is considered any substance or object from which its holder discards or from which it has the intention or obligation to dispose of.
For example, according to the Integrated National Urban Waste Plan, in Spain almost half of urban solid waste (by weight) is organic matter (44%), followed by paper and cardboard (21%), plastic (almost 11%)) and glass (7%), in addition to other waste such as wood, textiles or batteries, etc. (17%). (Responsible Buying Guide, nd)
Life cycle of a product. Source: Responsible Buying Guide
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Implementing a life cycle approach to product design and production can be addressed with the help of various tools available, from certification of standards to partial application as a product marketing strategy.
There are specific procedures or guides to follow for the standardization of LCA methodology by ISO, within the ISO 14,040 family of standards:
- ISO 14.040: 2006: Environmental management. Life cycle analysis. Principles and frame of reference. ISO 14.044: 2006: Environmental management. Life cycle analysis. Requirements and guidelines.
With the rise of "ecodesign", LCA has been integrating more frequently different criteria and parameters for evaluating environmental impact.
Like industrial design as a tool, LCA tries to increase efficiency at all stages from the conception, production, use and disposal of products. (Argentine Industry / Environment Unit, nd)
Phases of application of Life Cycle Analysis.
- Definition of the object and scope of the study. Preparation of the LCA model including inputs and outputs. This stage, in which data is collected, usually refers to the Life Cycle Inventory (ICV). The stage in which the relevance of the inputs and outputs are defined is usually known as Life Cycle Impact Assessment (VICV Finally, interpretation of the results. (ECOIL, sf)
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The past decade has seen how companies at the international level have declared themselves to be corporate citizens focused on caring for the environment and society. Sustainability, far from being just a public relations and marketing initiative or a way to reduce costs, has become a demand of the final consumer. This demand is for greater transparency and access to information of those products and services for which they pay.
The reason why it is necessary for companies to take action and decide to invest in knowing the entire process and impact that their products have on the environment and society is, in an evolutionary way, ceasing to be something optional to become a requirement: multinational suppliers they are faced with increasingly stringent demands for them to present the results of their impacts; There are a series of regulations in process that aim to provide companies with standardized and professional records of the measurement of their ecological footprint; These elements of rigor are compounded by the fact that end consumers are hungry for knowledge. According to a recent survey by Deloitte, 95% of shoppers said they would be willing to "buy green products" if the correct information was available.(ExpokNews, 2013)
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Some benefits for those companies that decide to use this analysis conscientiously are the following, among many others:
- Ability to make better sourcing decisions . By including multiple suppliers in an effort to know and reduce their impact, motivating them to innovate, the company can begin to make better purchasing decisions that will result in an improvement in the performance of it and its suppliers in terms of sustainability, having This evident consequences in future cost reductions. Being able to start a conversation with clients and increase brand value . As of today, the value of a brand revolves around the fact that it offers value and is competitive in the health care of the final consumer and the environment. Propel the growth and innovation of the business .By having clear information on the impacts of the business, the company is able to clearly decide on its areas of opportunity. Generate cost savings by making processes more efficient . By becoming clearer about what is triggering an environmental impact, as well as their respective costs, the company is more likely to be able to make decisions to make improvements in the areas of greatest relevance to it. (ExpokNews, 2013)
C ONCLUSION.
Carrying out a life cycle analysis can become an excellent tool to improve the economic, social and environmental performance of the company.
However, it is important to remember that this must be carried out and given as part of a broad and integrated organizational culture to all the key processes of the organization in order for it to be truly effective.
THESIS PROPOSAL:
" A product life cycle analysis as a strategy for the development of a socially responsible company".
Objective: to implement a product life cycle analysis as a strategic tool for a company on the way to becoming socially responsible in the Huatusco, Veracruz region.
B I BL I OGRAPHY
- ECOIL. (sf). http: / / ec. eu ro pa. eu /. Obtained from LIFE04 ENV / GR / 110: http://ec.europa.eu/environment/life/project/Projects/index.cfm?fuseaction=home.showFile&rep=file&fil=ECOIL_Ciclo_de_Vida.pdfExpokNews. (October 09, 2013). ExpokNews. Obtained from http://www.expoknews.com/el-valor-de-un-analisis-de-ciclo-de-vida/Godás, L. (2006). ELSEVIER. Obtained from OFFARM: http://www.elsevier.es/es-revista-offarm-4-articulo-el-ciclo-vida-del-producto-13094134 Responsible Purchase Guide. (sf). Obtained from UNCUMA, Union of Cooperatives of Consumers and Users of Madrid: http://www.uncuma.coop/guiacompraresponsable/seccion2_1.html Industria Argentina / Unidad de Medio Ambiente. (sf). Obtained from Life Cycle Analysis: https://inis.iaea.org/collection/NCLCollectionStore/_Public/44/100/44100443.pdfMuñiz, R. (sf). CEF.Center for Financial Studies. Obtained from:
