Should a product be entirely retired, the company will stop generating support for it and will entirely phase out marketing endeavors. Alternatively, the company may decide to revamp the product or introduce a next-generation, completely overhauled model. If the upgrade is substantial enough, the company may choose to re-enter the product life cycle by introducing the new version to the market. The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline. In its assessment of the “Product Life Cycle,” the website Mind Tools makes two key points about cycle longevity.
- From Don Wilson’s famous “six delicious flavors,” Jell-O moved up to over a dozen.
- Depending on the life cycle stage your product is in, you’ll choose how to price the product.
- Typewriters were, for the most part, discontinued in favor of computers, tablets, and smartphones.
- Also termed the ‘takeoff stage,’ the market area of the products also starts to increase by manifolds.
Then, you might take a look at the capabilities of your company to figure out how you can create a product that has been designed to meet those needs. The product life cycle is used to divide the life of a product from beginning to end. Customer feedback collects information from real potential customers about the need for your product or service. Moving into new product categories would mean moving back to the beginning of the product life cycle—and sometimes that’s what it takes to survive. They went from making video arcade games to video game systems for personal use.
Set a pricing strategy
The introduction stage took years for it to officially become accepted by the market. Additionally, the promised replacement of 8K is potentially years away, meaning that the growth and maturity stages might be even longer. The product development stage is the research phase before a product launch. Technically, this falls outside the definition of the product life cycle, but it’s a vital step to be aware of.
- Various discounts and coupons will stimulate your sales, and innovations such as eco-friendly packaging or a product in a new colour or material will help to attract a new audience and excite the existing one.
- As technology evolves, so do the platforms you have available for your products.
- An organization’s objectives during the introductory stage often involve educating potential customers about its value and benefits, creating awareness, and getting potential customers to try the product or service.
- Due to the low level of demand and sales, it didn’t offer or launch a wide range of models.
With so many marketing models to choose from, it can be difficult to know which is the best to use in a specific situation. This free guide has been created to help today’s marketers apply our pick of the most popular established frameworks to aid their decision making. You might find that the operational costs are too high, and you might realize that there are better products coming on the market.
Phase 2: Design
But it could clearly have fulfilled the strategy of promoting more frequent usage among current users as a means of extending the product’s life. At this point more competitors are in the industry, the rate of industry demand growth has slowed somewhat, and competitors are cutting prices. Some of them do this in order to get business, and others do it because their costs are lower owing to the fact that their equipment is more modern and productive. What factors tend to prolong the market development stage and therefore raise the risk of failure? Now that so many people know and in some fashion understand the product life cycle, it seems time to put it to work.
They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage. A major disadvantage of the product life cycle is that while it sounds all good and safe, there is uncertainty in certainty. We can never accurately guess or forecast the time of each stage of a product. Also, many products dive into the decline stage before it saturates the market and hit maturity.
Importance of the Product Life Cycle
Typically the Product Life Cycle pertains to the product, or category, within the industry. However, there are times that it is applied to individual products within a company, as described below. Most situations though, cause for an analysis of where the industry is and what is likely to occur in the near future. Maintaining an overview of your products’ life cycles also allows you to take inventory management measures to best meet demand and avoid over- or understocking. This is especially important at the beginning and the end of the life cycle.
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- Most consumers are likely already using a version of your product and have begun developing brand preferences.
- In the growth stage, the price can be defined based on demand and quality.
The conditions in which a product is sold changes over time and must be managed as it moves through its succession of stages. Never forget Philip Kotler, the world famous marketer’s, advice though; “Watch the product life cycle; but more important, watch the market lifecycle.” It’s not just products that come to an end but markets can too. Rising sales do not always indicate growth, falling sales do not always indicate decline. Some products may not experience a decline at all within the lifetime of the business management team (think about Coca-Cola for example which has enjoyed relatively consistent sales for over 100 years).
During this phase, marketing campaigns often shift from getting customers’ buy-in to establishing a brand presence so consumers choose them over developing competitors. Additionally, as companies grow, they’ll begin to open new distribution channels and add more features and support services. Another unfortunate side effect of the product life cycle is prospective planned obsolescence. When a product enters the maturity stage, a company may be tempted to begin planning its replacement.
How do you determine product life?
- Look for new products that have never been sold.
- Watch commercials and press releases announcing new products.
- Find products that were recently released which have rapidly increasing sales.
- Look at products that have enjoyed a level sales rate at its peak have reached the maturity stage of the life cycle.
If companies want to go back to growth, they will need to be innovative. Usually, they do this by either changing or making adjustments to the product to make it plausible to reach different market segments not yet captured by competitors. Marketing at this stage focuses on differentiating the product from competitors. During this stage, companies will see sales and profitability increase at a growing rate.
Product Life Cycle
The Product Life often viable to explore historical life cycles to see what the acceptance rate may be. And keep in mind that the benefits of a longer or shorter life cycle fully depend on the stage. If it sits in the introduction stage for too long, you may not see an effective return to cover expenses. However, if you expect it to break into a lengthy growth stage, it may be worth it. The maturity and decline stages are another opportunity to test new channels and adjust your strategy.