The product life cycle is the depiction of different stages a particular product goes through, from being introduced to the consumers (called Introduction) to being taken out from the shelves (called decline). It refers to the stages or phases products are supposed to experience from being manufactured to going through distribution channels, gaining market growth in the target consumer market, and finally facing a decline.
It is essential for developing strategies, promoting, and marketing the product depending on the stages. If understood and followed accurately, it helps in the product’s success. It helps managers understand and develop results-driven strategies for their products to enter and exit each stage effectively. From the launch of a product to the growth phase and finally, to being discontinued, the product life cycle describes all the stages of the product. Product life cycle strategies help in effective decision making as well, as it guides pricing, market research, market introduction, promotion, expansion, or cost-cutting-related strategies.
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What is the Product life cycle?
The product life cycle refers to the duration from the initial release of a product to the point at which it is discontinued and no longer available to the public by going through the introduction, growth, maturity, and decline stages.
- The Apple iPod was released in 2001 and during its introduction stage, it experienced explosive growth as consumers adopted it into their lives. It quickly became a necessity, and soon after its release, other products began to imitate the design of the iPod for their own devices.
- During this time, the iPod was one of the most popular gadgets on the market, and this success continued into its growth stage. As the years passed, more and more competitors began to enter the market with their own offerings which created a new level of competition for Apple.
- This caused sales to plateau during its maturity stage as consumers now had access to a variety of choices when it came to music players. Eventually, Apple decided to discontinue the iPod in 2022, thus marking the end of its product life cycle.
The product life cycle stages refer to the length of time a product is introduced to consumers into the market and then goes through market development until it reaches market saturation and started experiencing a decline phase and decrease in sales volume. Business management and marketing professionals use it for developing products as per consumer demand, making pricing decisions considering production costs and profit margins, testing distribution channels as well as trying new distribution channels for existing products, and ultimately understanding the market maturity of an existing product.
The whole process helps in finding ways to regularly support, maintain and optimize a product’s presence in the market. So, the Product life cycle is the process products go through from when they are first introduced, then considered successful products until they reach decline stages and have to be pulled out from the market.
What Is Product Lifecycle Management (PLM)?
Product lifecycle management (PLM) means managing the entire lifecycle of a particular product from being developed and introduced to the design, manufacturing, advertising, and service. There are many PLM software that helps businesses in this process and develop & introduce the products in the market.
Why Businesses should Understand the Product’s Life Cycle?
Some of the reasons why businesses should use the product life cycle are-
- Better decision making
- Better sales efforts
- Better organization
- Better prepared to face competition
- Better chances of leading the market
- Better planning
- Running better marketing campaigns
How Product Life Cycles Work
So, understanding the product life cycle is crucial to the management, marketers, and businesses to better understand the product’s journey.
These are the four stages of the product life cycle:
- Introduction- This is the initial stage. In this stage, marketing strategies & campaigns are developed so that people get to know about the product. The goal is to make your target audience aware of your product through marketing, especially inbound marketing. The chances of getting failed are very high in this stage.
- Growth- If the introduction stage is thriving product can enter the growth stage. Demand for the product grows & production & manufacturing are likely to be increased. Businesses have to be prepared to take on the competition and decide the optimum pricing, product variations, etc.
- Maturity- The maturity stage of the product life cycle represents that sales of a product would peak and then slow down. The market gets saturated as new competitors join the market. Companies try to be innovative with their product & marketing campaigns and strategies and plan to stay in a competitive market.
- Decline: This is when a product’s sales & popularity decline or a product can even be pushed out of the market because of sheer competition. This can happen for numerous reasons like reduced demand or better innovative products. Unless it can stay in demand, the product is taken out of the market.
Stages of the Product Life Cycle
In general, there are four stages of the product life cycle but if we expand those four stages, there can also be two more stages that take place during the life cycle of a product. So, we’d cover six stages of the product life cycle here –
This is the first product life cycle stage and one of the most challenging parts of the product life cycle as it concerns product development.
A lot of research, testing, and originality goes into this stage and a lot of money to create a particular product. Plus, a business can not generate revenue at this stage. This stage usually lasts for a long time.
Development Stage Marketing Efforts
Although a bit early, you can start a little bit of marketing for the product, analyze the market, run tests, and gather testimonials or interviews.
The introduction phase is where the main game starts. In this stage, companies try to build awareness about the product in a market by implementing marketing campaigns.
This means educating your possible customers about your product or service. Public awareness is very important as people will only buy your products only if they know about them.
Introduction Stage Marketing Efforts
Now the time is to promote your product, and you can create marketing campaigns like promoting the product on social media and educating through content marketing, blogs, etc. This stage must be successful so that people know about your product & buy it. User testing is also crucial in this stage to know if your product will perform better in the future.
This is the stage where demand and market for the product expand rapidly.
Growth stages are concerned with product growth, and profits are good at this time.
Growth Stage Marketing Efforts
At this stage, the focus should be on sales and running quality marketing campaigns. Social media is the right place to promote your product and educate people so that they choose you over competitors. Publishing articles & blogs is also a good option.
It is one of the most significant parts of the product life cycle. The profits and market share starts to stabilize in this stage. This is the most profitable stage of the product life cycle.
There are more competitors now & the market is more saturated than before. Companies try to be more efficient, the cost of production drops, and sales increase.
Maturity Stage Marketing Efforts
At this stage, the strategy should be to improve the current product and try to expand the market while at the same time differentiating your product, so your customers choose you over competitors. Poor strategy can lead to the decline of the product.
There are many competitors for your product at this stage, and few will even have a good portion of the market.
This might create a situation where you neither see growth nor face any decline. Companies try to lead the market if they already have a substantial market share.
Saturation Stage Marketing Efforts
Because of very high competition, companies spend a lot of time planning and implementing different strategies to stand out for their product. Differentiation should be the goal. By improving & tweaking product features, price, and customer support, you can beat the competitors.
At this stage, the demand for your product starts to fall. The company loses market share, and sales tend to decrease.
This can happen because of high competition, a competitor has acquired a considerable market share, and no innovative products.
Decline Stage Marketing Efforts
The decline stage is the hardest part for any company. A company can come up with different variations of the product, reduce the price, or explore a new market.
For extending the product’s life cycle, businesses can use new advertising strategies or can offer discounted prices, or they may add new features to optimize the value proposition of their products. Brands can also try exploring new markets and revamping brand packaging.
They can also try all of these strategies simultaneously to increase the shelf life of a product in the target market.
Examples of the Product Life Cycle
1) Product Life Cycle of Coca Cola
- Development: Coca-Cola was first developed by John Stith Pemberton.
- Introduction: The drink’s formula is a mystery & known to only a few people. It is believed that the name “Coco-Cola” was suggested by his partner & bookkeeper. By the late 1800s, the brand was beginning to get introduced to people.
- Growth: Just a decade after its launch, Coca-Cola was consumed in every state of America.
- Maturity: It can be said that the brand is currently in this stage or at least has been until the past few years.
- Decline: Although not a big dent, but revenue of Coca-Cola seems to have dropped over the past few years.
2) Product Life Cycle of Cable TV
- Development: Cable TV was made by John Walson in 1948.
- Introduction: After being introduced to the market between 1948 and 1950, cable TV showed signs of growth in 1962.
- Growth: By the 1980s, cable TV gained growth, especially after a long halt.
- Maturity: The market for cable TV matured in the 1990s; most households had access to television.
- Saturation: At the beginning of the 21st century market became saturated. Cable TV was competing with new innovative TVs & the internet was soon going to be a competition.
- Decline: Cable TV has seen a significant downhill in current years, mainly because of Netflix, Hulu, and Amazon Prime. And its market share is soon going to drop more.
When to Use the Product Life Cycle?
Brans or businesses can use a product life cycle strategy for accomplishing different goals such as-
1) Establishing competitive authority
If the product is new, marketing can be used to build awareness by advertising its features. If the product is established, you can advertise by showing customer testimonials.
2) Deciding on a pricing strategy
You can set a lower price for a new product and a higher price if the product shows signs of growth.
3) Creating a marketing strategy
This is important for promoting and educating people about your product. Creating content and running successful campaigns on social media is essential.
4) Responding before the product begins its decline
A product can decline because of competition, so keeping a good strategy in mind is vital when going through life cycle stages.
What factors affect the product life cycle?
Some of the key factors that might influence the product life cycle of a brand’s product are-
1) Ease of entry
The situation of the market plays a big part. If entry into a particular market is easy, the life cycle of that product will be short.
Contrarily, if the entry is challenging life cycle will be longer.
2) Advancements in technology
If the rate at which advancements in technology are fast, the life cycle will be short & if the technology advancements are slow, the life cycle will be much longer.
Brands should understand how quickly technology changes as well as they should know about the changes that are relevant for consumers.
3) Rate of market acceptance
If customers accept a particular style of product quickly, the life cycle is short. However, if the acceptance is slow, the life cycle is much longer.
If acceptance takes a longer cycle in the introduction stage, it may not offer a good return to your expenses but if it has a longer cycle in the growth stage, it might offer good returns.
4) Economic forces
A bad state of the economy, like a global pandemic or financial crisis, can slow the life cycle.
While On the other hand, if an economy is recovering from the financial crisis, it might also shorten an introductory and even growth phase of a product because of the mass increase in consumer spending.
Therefore, paying heed to market trends is very important for optimizing the use of a product’s life cycle.
Summary of the product Life Cycle
Characteristics of the Product life cycle
|Rapidly Increasing Sales
|High cost per customer
|Average cost per customer
|Low cost per customer
|Low cost per customer
|Early Majority + Late Majority
|More in number
|Stable number, beginning to decline
Objectives of Product Life Cycle
|Create product awareness and Trial
|Maximize market share
|Maximize profits and defend market share
|Reduce expenses & milk brands
Strategies of Product life Cycle
|Offer basic product
|Offer product extension, service, warranty
|Diversify brands / models
|Phase out weak products
|Change cost +
|Price to penetrate market
|Price to match better competition
|Build selective distribution
|Build intensive distribution
|Build more intensive distribution
|Selective phase out of unprofitable unit
|Build product awareness among early adopters and dealers
|Build awareness and interest in mass market
|Stress on brand difference and benefits
|Reduce to retain hard core loyals
|Use heavy sales promotion to induce trial
|Reduce sales promotion due to increased consumer demand
|More sales promotion to encourage brand switching
|Reduce to minimum level
Here is a video by Marketing91 on the Product Life Cycle.
Liked this post? Check out the complete series on Product Management