Learn about the product life cycle phases all products go through, from development to decline.
Published 30 Jun 2023
The Product Life Cycle is a concept that shows a product's stages, from its introduction to the market until its eventual decline and withdrawal. The Product Life Cycle has five phases: development, introduction, growth, maturity, and decline.
Understanding the Product Life Cycle is essential for businesses because it helps them to plan and manage their products effectively. By understanding which stages a product is in, businesses can make informed decisions about marketing, pricing, and product development. They can also anticipate changes in the market and plan accordingly.
PLC offers numerous advantages, impacting the marketing strategy and financial performance. By implementing this approach, you can reap these benefits.
On the other hand, a poorly managed product life cycle will result in the following:
One limitation is that the length of each stage can vary greatly depending on the product and industry. Some products may have a short introduction phase, while others may have a long growth phase. Additionally, the product life cycle does not account for external factors such as consumer trends, economic conditions, or competition changes.
The model assumes that the product is steady throughout its lifecycle and that there are no significant changes to the product or market. However, in reality, businesses may need to adjust their products or marketing strategies in response to changes in the market.
Boston Consulting Group (BCG) Matrix is another analytical tool for assessing the market positioning of a product. It categorizes products by their market growth and market.
And unlike PLC, which has five stages, BCG Matrix has four.
The product life cycle starts with development. It’s where market research begins. Before launching your product, you’ll refine your concept, test your product, and create a launch strategy. Concept testing with potential users is crucial in this step. It helps you understand your target market’s reaction to your concept and make changes based on their feedback before creating the product.
When launching a new product, there will be costs before generating income. Financing may come from personal funds or investors, but limited funding and high risk exist. To attract investors and customers, create a brief sketch or prototype to showcase market potential. Validate the market early to start raising funds for the launch.
When a product is launched, it enters the introduction stage of its life cycle. During this stage, the marketing team’s primary focus is to create product awareness and reach the target market. Content marketing and inbound marketing strategies help in promoting the product.
The time spent at this stage can vary based on product complexity, competition, innovation, and other factors. Success in this stage can lead to progression to the next stage.
Consumers are now purchasing the product in response to marketing campaigns. Demand and profits are rising, and competitors seek to challenge your success.
In this stage, marketing shifts from getting attention to establishing a brand presence. You need to demonstrate why your brand is better than the competition. Your company may add new product features, enhance support services, and expand distribution channels as it grows. These efforts should be a key focus of your marketing strategy.
Growth slowdown marks the start of the maturity stage. At this point, the market may reach a saturation point as competition increases despite high consumer usage. Lowering your prices might be required to remain competitive. Additionally, during this stage, sales remain steady while costs decrease.
Unlike the initial stages, where your marketing efforts focus on product awareness, at this stage, your marketing should focus on highlighting your distinct product features, strengths, and customer service. Otherwise, you’ll enter the decline stage too soon.
If your brand loses popularity among consumers, it may enter the final stage. As the market expands, competition will increase, and market share will be divided among various players. And an increase in competition often leads to a decrease in sales.
While you can manage your product’s concept, positioning, and marketing internally, external factors can also play a role in its life cycle. Some examples of external factors that can impact the PLC are listed below.
Factors like expenses, market size, and barriers to entry also play a role. With little competition and low barriers, your product’s life cycle may be shorter. On the other hand, higher levels of these factors may make entry harder but lead to a longer product lifespan.
Industries with fast tech advancement, such as cell phones, tablets, or computers, tend to have short product lifecycles. Maintaining competitiveness requires understanding the pace of tech evolution, your target market’s needs, and when to improve your product.
The consumer acceptance rate is a significant factor in determining the life cycle of a product. Analyzing the life cycles of comparable products can provide insight into your acceptance rate. Conducting market research can aid in forecasting the speed of adoption and acceptance of your product.
During the height of the pandemic lockdowns, people spent less or were more selective in buying habits, resulting in an extended introductory phase for new products. Strong spending can shorten the introductory phase and extend the growth phase. Economic forces are dependent on your product, target market, and industry.
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Below are some examples of product life cycles for some brands.
To use the product life cycle, here are some ideas to follow:
During the introduction stage, the priority is to position your product in the market as the most desirable option based on the chosen benefit, whether it be affordability, luxury, or any other factor. The goal is to distinguish your product from competitors and position your brand as a credible expert in the industry.
Pricing strategies vary as products go through their life cycle. Introductory pricing is a marketing strategy that involves positioning oneself against competitors. Product pricing may vary during growth due to feature additions, availability, and other considerations. Competitive pricing can result in price reductions as a business becomes more mature. A decline typically results in a decrease in price or a return to the beginning.
Each stage of the product life cycle presents opportunities to refine your marketing strategy. During the introduction stage, you will test ads, explore channels, and connect with your target audience. In the growth stage, use great content to connect on your channels. In maturity, you may try new messaging, different media, and other ways to delay the decline.
Understanding the product life cycle is valuable for management as it provides insight into product performance and potential strategic approaches. Knowing which stage their product(s) are in allows companies to adjust resource allocation, prioritize products, manage staff time, and plan future innovations.
While the term “product life cycle” may refer only to physical products, the concept can be applied to various offerings, including services, software, and even ideas. For example, introducing a new software program with great fanfare, experiencing a surge in popularity and growth as users adopt it, reaching a point of maturity where it becomes a standard tool in its industry, and eventually declining as it becomes outdated or surpassed by newer innovations.
Every time you introduce a new product or service. The Product Life Cycle is a fundamental concept in marketing, and it’s essential to understand how it applies to your business. Using the Product Life Cycle, you can plan your marketing strategies, pricing, and promotions and make informed decisions about when to introduce new products or services.
Product life cycle management is monitoring a product’s performance throughout its lifespan. Based on market reception, it involves optimizing the product’s development, design, manufacturing, marketing, and end-of-life stages to ensure that the product is profitable and meets customer needs throughout its lifecycle.
The length of time a product spends in each stage is unpredictable, but studying the characteristics of each stage and analyzing past experiences can assist in planning for the future. You can accomplish this by using a powerful tool like SafetyCulture (formerly iAuditor), which can help you progress your products through their life cycle.
Here are some ways SafetyCulture can help.
Rob Paredes is a content contributor for SafetyCulture. He is a content writer who also does copy for websites, sales pages, and landing pages. Rob worked as a financial advisor, a freelance copywriter, and a Network Engineer for more than a decade before joining SafetyCulture. He got interested in writing because of the influence of his friends; aside from writing, he has an interest in personal finance, dogs, and collecting Allen Iverson cards.
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