What is the Product Lifecycle and What are its stages?
What is the Product Life Cycle?
An item’s lifecycle is the progression during which it goes through the four phases of its market life. Introduction, Growth, Maturity, and Decline are the four stages of the life cycle. There are various stages in every product’s life cycle, and each takes different amounts of time.
There isn’t anything wrong with project managers calling the product they’re working on their ‘baby’. Products are like people in that they are born, they grow up, they mature, and eventually, they pass away. These four stages are known as their life cycle.
Even though some products get extended life spans, how many iPhone models have been released? The path to disappearance for others involves passing through these phases. Generally, this occurs because new products meet consumer needs better and overtake old ones. Just think of how CD walkmen were replaced by MP3 players.
An understanding of the product life cycle doesn’t just explain how sales trends work overtime. Furthermore, it indicates how much marketing effort is necessary to ensure the future success of the product.
Life Cycle Through the Stages:
An introduction stage is where the product is introduced to the market and the business attempts to establish itself on the sales ladder by:
- Assuring the market that the new product is of high quality and establishing a brand.
- It may also be necessary to initially set a high price to recoup development costs following an initial low pricing policy.
- To get the product onto the market, a distribution model must be chosen.
- Targeting specific target groups with the promotion of the product, such as online forums.
In the Growth stage, we have completed the Introduction stage. To take development at the first stage to the next level, the following steps will be taken:
- The company’s quality should be maintained and any extra services should be added as soon as necessary.
- To maintain sales growth, keep the price at a reasonable level.
- Improving distribution and finding new, faster ways of putting the product on the shelves.
- An expansion of the product’s audience and its market share through marketing campaigns.
Next Stage In Life Cycle:
The next stage in the life cycle is Maturity, which follows growth. To do this, the company:
- By adding features that will differentiate the product from the inevitable competitors that will enter the market.
- The practice of reducing prices to counter competition.
- Utilizing incentives and reevaluating distribution channels to encourage retailers to carry the original product instead of the newcomers.
- The new promotions try to demonstrate the differences between the products.
The decline will lead to the following considerations for the business:
- Add or remove features or find uses for the product while keeping it on the market.
- The product will be sold to a niche market segment and the production will be cost-effective.
- The product will be discontinued or the production rights will be sold to another company.
For any Digital Marketing Agency, it is vital to maintain a strong grip on the product life as the product cycle can maximize returns and can help businesses determine when the right time is to divest themselves of a product. The absence of this may result in a reduced lifespan for the product and cost money for the business.
Stages Of Lifecycle:
Stage One: Introduction:
A product will enter this stage when it is finished with its testing phase and is approved by the FDA. A seller or manufacturer’s growth is generally slow in the beginning unless the company is well-known. In spite of the product’s excellent attributes and ability to meet consumer needs, few people are familiar with it, so it will not of interest to them. In addition, the following obstacles need to be overcome:
- It is possible that vendors and internal sales teams do not know enough about the product yet to sell it effectively
- Distributors do not appear to have clearly defined channels
There may not be a great deal of excitement about an upcoming product unless it’s a breakaway success. Introduction phases have the following characteristics:
- Sales volumes are relatively low and are increasing slowly.
- Marketing, consumer testing, advertising, distribution, and other awareness-spreading campaigns are very expensive, especially when the industry is competitive.
- To make customers want your product, you must entice them. The offer may be in the form of free samples, discount codes, rebates, or an introductory price reduction.
- The slower sales and the additional money spent on marketing have resulted in reduced profits for the company.
Even though everything seems cloudy, there is a bright spot. It is unlikely that there will be much competition at this point, and if the public embraces the product, the manufacturer has a rare opportunity to create a monopoly.
A great deal of money has been spent on the research and development of holographic projection products, which has led to their high prices, which are making their adoption more gradual. Technology Products in this phase are a good example of products in the introduction stage.
Stage Two: Growth:
It is now time for the introductory stage to end. During the growth phase of the product life cycle, brand awareness spreads and the market begins to respond. Customers and distributors are becoming more aware of the product’s advantages and benefits thanks to advertising and word-of-mouth, which has allowed it to become profitable and increase its return on investment. The manufacturer may then invest even more in marketing, introduce support services or begin developing new products, according to the strength of customer response.
Although the growth phase represents progress, the newly launched product is at risk during this phase. Here are some examples:
- Depending on the public reaction, the competition might develop and promote a competing product to take advantage.
- Whenever you make a mistake in marketing or business performance, more attention is paid to it, and bad news travels fast.
Manufacturers need to take care during this stage to prevent competitor attacks on their products or negative publicity from deterring or hindering their growth. There have been too many failed products because of this approach.
In the next few years, other electronics brands such as Samsung, Lenovo, and others started producing their tablets. Apple’s iPad appears to be a product that is here to stay for the foreseeable future.
Stage Three: Maturity:
This believes that sales peak during the maturation phase of the product life cycle, which is the longest. When the demand is highest, this is when it is strongest. In addition to the public’s positive reaction, competitors have also taken notice. Once competitors’ products begin to appear on the market, the manufacturer may need to:
- Price reduction resulting from increased competition
- The product needs to be enhance to make it more appealing to consumers than its competitors
- To encourage distributors to continue buying the product, offer incentives
- The marketing materials should address the difference between the product and the competition
Manufacturers tend to extend the product life cycle to maintain market share during the maturity phase, which is when there are little growth potentials and prices tend to oversaturate due to competitors. There might be a decrease in sales levels at first, but they should eventually stabilize.
As a result of their portability, consumers loved laptop computers when they first appeared. Since the manufacturers continue to add more advanced features, such as high-resolution cameras and touchscreen capability, laptops will continue to be relevant for the foreseeable future, but as a concept, they are maturing, with multiple brands available at competitive prices.
Stage Four: Decline:
The product’s saturation point is reaching during the decline phase. This is the stage when the manufacturer tries to extend the product’s lifespan. They can modify their products to keep them relevant or they can withdraw them and move on to another product.
As an example: When electronic word processors first appear, they hailed as a revolutionary change from manual typewriters. In the 1970s, private computers invented, allowing users to type, make changes, and print out documents before printing them, putting a stop to the demand for word processors. With the introduction of word processing software, these devices are no longer necessary.
Lessons from the Product Life Cycle
Despite these differences, each stage of the life cycle has its challenges that affect the manufacturer’s advertising, support, and pricing strategies. A well-informed strategy for increasing sales and profits is to be aware of them.