Marketing91

  • HOME
  • Marketing Concepts
    • Marketing
      • Retail Tutorials
      • Market Research
      • Customer Management
    • Strategy
    • Management
    • Advertising
    • Branding
    • Business
    • Finance
    • Sales
    • Career Guidance
  • Digital Concepts
    • Blogging
    • Search Engine Optimization
    • Social Media Marketing
    • Facebook Marketing
    • Internet Marketing
    • Ecommerce
  • Brands
    • Marketing Mix of Brands
    • SWOT analysis of Brands
    • Brands Strategy Analysis
    • Business Models
    • Brand Competitors
    • TOP 10
  • Courses
Home » Marketing » Product Life Cycle

Product Life Cycle

January 6, 2021 By Hitesh Bhasin Tagged With: Marketing

A product is like a human being. It is born, grows up fast, matures and then finally passes away. The product life cycle discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market. (Image courtesy – arundelstreet.com)

However, the basic difference in case of human beings and products is that a product has to be killed by someone. Either the company (to bring better products) or by competition (too much external competition). There are several products in the market which have lived on since ages (Light Bulbs, Tubelights), whereas there are others which were immediately taken off the shelf (HD DVD).

Thus the Product life cycle deals with four stages of a products life.

Table of Contents

  • Stage 1 of Product life cycle – Introduction of the product.
  • Stage 2 of Product Life Cycle – Growth of the product
  • Stage 3 of Product Life Cycle – Maturity stage of the product
  • Stage 4 of Product Life Cycle – Stage of decline
  • Summary of the product Life Cycle
  • Characteristics of the Product life cycle
  • Objectives of Product Life Cycle
  • Strategies of Product life Cycle
  • Video on the Product Life Cycle

Stage 1 of Product life cycle – Introduction of the product.

The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product.

If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.

Characteristics of Introductory stages of Product life cycle

  1. Higher investment, lesser profits
  2. Minimal Competition
  3. Company tries to Induce acceptance and gain initial distribution
  4. Company needs Promotions targeted towards customers to increase awareness and demand for product
  5. Company needs Promotions targeted towards channel to increase confidence in the product

Stage 2 of Product Life Cycle – Growth of the product

Once the introductory phases are over, the product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits.

This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.

Characteristics of Growth stage of Product life cycle

  1. Product is successfully launched
  2. Demand increases
  3. Distribution increases
  4. Competition intensifies
  5. Company might introduce secondary products or support services.
  6. Better revenue generation and ROI

Stage 3 of Product Life Cycle – Maturity stage of the product

One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a result, the USP’s of the product become less attrative.

Along with competition, Penetration pricing becomes a weapon for competitors. Competitors sell products with the same features at lesser prices thereby trying to penetrate in the market. Nonetheless, The sales of a product (especially sales from return customers) is at its peak point during the maturity stages. The growth of sales may be lesser, but the sales revenue of the organization is maximum during the maturity stage of product life cycle.

Characteristics of Maturity stages of Product life cycle

  1. Competition is high
  2. Product is established and promotion expenditures are less
  3. Little growth potential for the product
  4. Penetration pricing, and lower profit margins
  5. The major focus is towards extending the life cycle and maintaining market share
  6. Converting customers product to your own is a major challenge in maturity stage

Stage 4 of Product Life Cycle – Stage of decline

1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits.

Thus it becomes a typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project.

Characteristics of Decline stages of Product life cycle

  1. Market is saturated
  2. Sales and profits decline
  3. Company becomes cost conscious
  4. A lot of resources are blocked in rejuvenating the dead product.
  5. There are only three options left with the company
    • Re positioning or Rebranding of the product to extend product life cycle
    • Maintain the product as it is and reduce costs to get maximum profits till the product can produce profits
    • Take the product off the market.

Summary of the product Life Cycle

Characteristics of the Product life cycle

Stages Introduction Growth Maturity Decline
1. Sales Low Sales Rapidly Increasing Sales Peak Sales Declining Sales
2. Costs High cost per customer Average cost per customer Low cost per customer Low cost per customer
3. Profits Negative More Profit High Profit Declining Profit
4. Customer Innovators Early Adopters Early Majority + Late Majority Laggards
5. Competitor Few More in number Stable number, beginning to decline Declining numbers.

Objectives of Product Life Cycle

Stages Introduction Growth Maturity Decline
Objectives: Create product awareness and Trial Maximize market share Maximize profits and defend market share Reduce expenses & milk brands

Strategies of Product life Cycle

Stages Introduction Growth Maturity Decline
1. Product Offer basic product Offer product extension, service, warranty Diversify brands / models Phase out weak products
2. Price Change cost + Price to penetrate market Price to match better competition Cut price
3. Distribution Build selective distribution Build intensive distribution Build more intensive distribution Selective phase out of unprofitable unit
 

4. Advertising

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
5. Sales

Promotion

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

Video on the Product Life Cycle

Share this post:

Share on Facebook Share on Twitter Share on LinkedIn Share on Email Share on WhatsApp
Digiaide Marketing and Digital Marketing Courses

Related posts:

  1. Distribution Definition – What is Distribution?
  2. Customer life cycle explained in 7 steps
  3. What is Product Development? Definition, Meaning, Phases
  4. What is Product Launch – Examples, Types, Advantages
  5. Distribution System: What it is and Types of Distribution Systems
  6. Understanding Distribution cost – 11 types of Distribution expenses
  7. Customer Centric – Definition, Meaning, Characteristics, Advantages
  8. Marketing Communication: Meaning & Types of Marketing Communication
  9. Buyer Readiness State – Different Stages Of Buyer Readiness
  10. How to Choose Distribution channel in Marketing?

What Do You Want To Learn About? (Start Here)

  1. Marketing Hub
  2. Management Hub
  3. Marketing Strategy
  4. Advertising Hub
  5. Branding Hub
  6. Market Research
  7. Small Business Marketing
  8. Sales and Selling
  9. Marketing Careers
  10. Customer Management
  11. Top 10 Lists
  1. Internet Marketing
  2. Blogging
  3. Search Engine optimization
  4. E-commerce
  5. Facebook Marketing
  6. Social Media Marketing
  7. Business Model of Brands
  8. Marketing Mix of Brands
  9. Brand Competitors
  10. Strategy of Brands
  11. SWOT of Brands
GET DAILY MARKETING UPDATES

About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world.

Comments

  1. sanjib says

    explained very well. Thanx a lot.. 4 such an effort.

    Reply
  2. uttam choradia says

    how do you predict the life cycle of a product. how does technology affect the life of a product. how does rise in income / fall in income of product buyers affect the life cycle of a product. over a period of time preferences of product users change and how do you account for that. why a product which is popular in one period suddenly loses its ground and what factors other than competition are responsible.

    Reply
  3. ajibade damilola says

    identify, describe to distinguish the relationship and the similarities that exist in the life of human being, business life and product life stages with the aid of diagram

    Reply
  4. Andreea says

    You should take into account the market maturity and the industry. You might have a new product, but you might be an originator in a new market, might be in a developing market with 1-2 competitors, or be in a mature market with lot of competitors.
    Strategy must be adapted to context

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Accordions
Part 1 - Models of Strategy
  1. Ansoff Matrix - The growth share Matrix of Ansoff
  2. BCG Matrix or BCG analysis
  3. Product Life Cycle
  4. Benefits and limitations of Product life cycle
  5. SWOT Analysis
  6. 7s Framework by McKinsey
  7. Porter's Diamond Model
  8. SOAR analysis explained
  9. The GE McKinsey matrix
  10. Porter's Value Chain Model
Part 2 - Models of Strategy
  1. Michael Porter's Five forces model for industry analysis
  2. Mintzberg's 10 school of thoughts for Strategy formulation
  3. PESTLE analysis
  4. Competitive profile matrix and analysis
  5. Competitor Analysis
  6. Strategies of market leaders
  7. Product Differentiation
  8. Types of Differentiation Strategies
  9. Gap analysis
  10. Process of Gap Analysis
Part 3 - Models of Strategy
  1. EPRG Framework and its 4 Stages
  2. Opportunity analysis
  3. Core competency
  4. Diffusion of Innovation
  5. What are Strategic business units and their advantages
  6. 6 reasons why Strategic Business Units are Important
  7. Sustainable competitive advantage (SCA)
  8. The Supply and Demand Curve
  9. Triple Bottom Line Concept
  10. Vertical integration - Three types of vertical integration
Part 4 - Models of Strategy
  1. What is 3C Model by Ohmae?
  2. What is Bowman's Strategy Clock?
  3. What is CAGE Framework?
  4. What is Disruptive Innovation?
  5. What is House of Quality?
  6. What is Technology Life Cycle?
  7. What is The Kraljic Matrix - Portfolio Purchasing Model?
  8. What is Vrio Analysis?
  9. Defensive Marketing
  10. Economies of Scale
Part 5 - Models of Strategy
  1. Product line competition Explained
  2. What is Six Sigma? Six Sigma Concept Explained
  3. What is Total Quality Management?
  4. What is Turnaround Management?
  5. Wheel of consumer analysis
  6. What is Benchmarking? Importance of Benchmarking
  7. 9 Types of Benchmarking
  8. 7 reasons diversification strategy is better
Recent posts
  • Common Market – Definition, History and Examples
  • Commodity Futures – Definition, Example and Risks
  • Bond Yield – Definition, Types and Calculations

Marketing91

MORE INFO

  • About Marketing91
  • Privacy Policy
  • Cookie Policy
  • Disclaimer
  • Terms of Use
  • Advertise
  • Contact us
  • Sitemap
  • ISO 9001:2015 Certified

LEARNING SERIES

  • What is Communications
  • Types of Communication

WE WRITE ON

  • Marketing
  • Small Business
  • Management
  • Internet Marketing
[email protected]

Copyright © 2022 Marketing91 All Rights Reserved