Life Cycle Assessment (LCA) Life cycle assessment is a process for estimating the environmental aspects and potential impacts of the whole lifecycle of products or services. Ecological impacts are examined in relation to the environmental and human health depletion of natural resources. It does not observe economic and social character. A life-cycle assessment (LCA) is a technique to assess environmental impacts associated with all the stages of a product's life from-cradle-to-grave (i.e., from raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling). LCA’s can help avoid a narrow outlook on environmental concerns by: 1. Compiling an inventory of relevant energy and material inputs and environmental releases; 2. Evaluating the potential impacts associated with identified inputs and releases; 3. Interpreting the results to help you make a more informed decision. Goals and Purpose The goal of LCA is to compare the full range of environmental effects assignable to products and services in order to improve processes, support policy and provide a sound basis for informed decisions. The term life cycle refers to the notion that a fair, holistic assessment requires the assessment of raw-material production, manufacture, distribution, use and disposal including all intervening transportation steps necessary or caused by the product's existence. Types of LCA. Attributional LCA To establish the environmental impacts associated with the production and use of a product, service or process, at a current point in time. Consequential LCA Identify the future environmental consequences of a decision, which means that any market and economic implications are accounted for. Four main phases of LCA Phase 1 Goal and scope definition Phase 2 Inventory analysis Phase 4 Interpretation Phase 3 Impact Assessment A Life Cycle Assessment is carried out in four distinct phases as illustrated in the figure shown to the right.The phases are often interdependent in that the results of one phase will inform how other phases are completed. Stage 1. Goal and Scope An LCA starts with an explicit statement of the goal and scope of the study, which sets out the context of the study and explains how and to whom the results are to be communicated. The goal and scope document includes technical details that guide subsequent work: 1. the functional unit, what precisely is being studied which provides a reference to which inputs and outputs can be related; 2. the system boundaries; 3. any assumptions and limitations; 4. the allocation methods used to show environmental loads on a process when several products or functions share the same process; 5. the impact categories chosen. Stage 2, 3, 4 These stages are often relient on sophisticated computer programs and extensive data. Examles can be found on the internet. The Product Life Cycle A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the graph below: Product Life Cycle Diagram Introduction Stage In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows: Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained. Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs. Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product. Growth Stage In the growth stage, the firm seeks to build brand preference and increase market share. Product quality is maintained and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition. Distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience. Maturity Stage At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit. Product features may be enhanced to differentiate the product from that of competitors. Pricing may be lower because of the new competition. Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. Promotion emphasizes product differentiation. Decline Stage As sales decline, the firm has several options: Maintain the product, possibly rejuvenating it by adding new features and finding new uses. Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment. Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.