The product life cycle can be a powerful tool for marketers and decision-makers of a company to improve their marketing strategies, plans, and customer loyalty, optimize costs, and witness better profit margins.
Every product has a life cycle, whether it’s a car, medical equipment, cosmetics, smartphones, or anything else.
Knowing when to launch a product, make necessary improvements, remove it from the market, or create a new one is essential to remain competitive in your market and make profits.
In this article, I’ll discuss the product lifecycle, its stages, strategies for each stage, examples, and benefits.
What Do You Mean by the Product Life Cycle?
The complete lifespan of a product the moment it goes into development to when it’s discontinued from the market, is called the product life cycle. It includes various stages:
- Product development using suitable skills, tools, techniques, and processes
- Introduction in the market for the intended users
- Growth, when the product’s demand, sales, and popularity increases
- Maturity, when the product has attained maximum success and has started showing some decline
- Decline is when the product’s popularity and sales rapidly decline and are therefore removed from a market.
The product lifecycle is a useful tool for marketers, product managers, and other important stakeholders of a company. It helps them figure out the most suitable time to launch a product or service, start its development and design, make marketing strategies, reduce or increase its pricing, offer discounts at a suitable time, expand its reach to new countries or markets, or discontinue its production.
Example of the Product Life Cycle (Case Study)
Let’s take iPhones as an example. iPhones are of high quality, whether you talk about their quality, features, or security, and the credit goes to its development team and key decision-makers.
When production finishes, they are launched in certain markets with demand. They keep the pricing high to mainly attract premium customers. In this stage, they also keep the sales and marketing costs high. Its demand starts increasing as it approaches the growth stage. More marketing is done to reach more audiences, and sales increase sharply.
In the maturity stage, sales may slow down as competition increases. This continues till the sakes start declining when better products with advanced technology and features are introduced.
How Does the Product Life Cycle Work?
Doesn’t the product lifecycle seem analogous to the life of a human being?
I think it does.
A human’s life begins in the womb, where it starts developing till nine months. Next, the baby is born into the world. They then start growing in the form of intellect, height, body mass, etc. up to a certain age. They study, choose their profession, and build a life for themselves, and are at the peak of their health and career.
Next, they mature and their health and income sources start showing an initial decline. They die due to an illness, accident, or simply age and depart from the physical world. This marks the end of a human’s lifecycle.
Similarly, the lifecycle of a product begins in the minds of product teams, decision-makers, and stakeholders. They start developing the product with each of its parts or features. Once the product development is complete, the company launches the product in the market.
Next, the product starts attaining growth with time with the help of the right marketing strategies. At this stage, the product shows the company greater sales, revenue, and fame. Then, there comes a point when the product faces a lot of competition and market saturation and ultimately starts to decline its sales and popularity.
With rapid decline, the company finally removed the product from the market. This marks the end of the product lifecycle.
Now you know how much they are similar 😊
Stages of the Product Life Cycle
#1. Development Stage
Based on the type of your business, you will plan on developing a product. This initiates the product life cycle, where you must determine the type of product to develop. For example, if you are a mobile manufacturing company, you may want to create a new smartphone with unique features and looks that can entice your target customers.
This requires a lot of discussion sessions with your product team, investors, and other stakeholders. You will need to brainstorm a lot of aspects of the product for its entire lifecycle. You must plan each step and create solid strategies to approach each step.
It involves thorough market research, assessing the pain points of customers, competitor research, your company’s capabilities to solve those pain points through a solution, and more.
Once done, you can start developing the product by employing your resources, team expertise, and other factors. You want to start with a prototype and test it to evaluate its functionality. If you spot issues, correct them immediately. Next, you can produce some fully-fledged products and introduce them to the target market.
#2. Introduction Stage
Next up is the introduction stage, when you launch your product in the market. It’s advisable to introduce a batch of product in a smaller region to evaluate how it performs. In this stage, you will need to create effective marketing strategies for the product to promote it before the target audience.
For that, you must determine where your audience is more likely to notice the product. It could be social media channels, YouTube, television, billboards, etc. Based on that, create your brand and product messaging and tailor ads. Show your USP, unique features, and other benefits customers can avail of with the product.
As a result, you might witness initial sales, and it will grow slowly with time, given the product has potential. At this stage, consider taking customer feedback from those who have used the product.
This input will help you spot issues in the product so you can resolve them and launch more products in the market with improved versions. Keep on reiterating and enhancing the product to meet customer needs and boost sales.
#3. Growth Stage
In a product lifecycle, the growth stage is where your product has gained popularity in the market and consistently gives you sales and revenue. Here, product demand continues increasing. This means the competition will also increase in the market. Other brands might want to sabotage your strategies or replicate them.
Thus, you must strive to beat the competition by assessing and improving your methods and strategies. In this stage, it’s also essential to keep up with the customer’s expectations by maintaining the quality of the product. You can even improve the quality and usage by introducing more features to it.
Keep taking customer feedback in different channels and address issues proactively to give the impression that you actually care for the customers. Furthermore, you can now plan to expand your product coverage to other regions, if applicable. For this, thoroughly understand the new market dynamics, challenges, and competitors, and figure out ways to tackle them.
Once done, introduce it in the market and run even better marketing strategies on a wider scale. This will create brighter opportunities for generating higher sales, revenue, and return on investment (ROI). You can use the profits to invest in creating more products, sustaining operations, and expanding your business.
#4. Maturity Stage
After the growth stage, the product continues to be popular and attract sales. You can say that the market for the product has become saturated. You can see neither growth nor decline significantly in the market. Here, competition is higher than ever, and there are many similar products in the market from different brands.
In this stage, you will need to keep retaining customers by employing various strategies like building stronger relationships, working on feedback, etc.
However, no product will stay in the market, no matter how good it is, since technologies, techniques, and customer demands change. This is where you will notice your sales have begun declining. Even if it doesn’t decline rapidly, the sales numbers don’t increase that fast. This is the maturity stage of a product’s lifecycle.
In this stage, the marketing and production costs could be reduced as well. So, if you still want to make profits, provide more benefits to the customers, like larger discounts, attractive offers, etc. so they buy more from you.
#5. Decline Stage
A product’s sales and market share begin declining rapidly no matter how much effort you put in when it enters the decline stage. This may happen because of many reasons – outdated technology, competition, customer preferences, and so on.
People always look for better products that are advanced, user-friendly, rich with features, and still affordable to them. When they find something better, they are going to switch to it.
So, if your product enters this stage, I would suggest that you discontinue producing or promoting it and save the costs. If possible, you can innovate and relaunch the product with improved versions.
Many brands also start selling the same product to other markets or countries where its demand is still there. Alternatively, you may create a new, advanced product that can meet modern demands.
Why Should You Care About the Product Life Cycle?
- Effective product management: Product lifecycle allows marketers and decision makers to figure out the stage in which their product currently lies. This way, it becomes easier to manage the product, like its cost, features, and other aspects.
- Improved strategies: Based on the stage of a product, you can make suitable strategies for marketing, distributing resources, and employing the right skills and methods. This will help you delay product decline and extend its lifecycle.
- Better decision-making: Whether launching a product or removing it from shelves, you can make better decisions about your product at the right time.
- Increase in ROI: With improved strategies and decisions, the product life cycle can yield an improved return on your investment. You can reap maximum benefits from your marketing efforts, save costs, and optimize operations.
- Boost customer loyalty: By enhancing the product and customer service in various stages, you can witness better customer loyalty and satisfaction.
- Adapt to changes: Knowing when to improve your product, discontinue it, or launch a new product makes it easy to adapt to changes and stay relevant in the market.
Product Life Cycle Management Strategies
Product life cycle management (PLM) refers to the process of managing a given product in each stage of its lifecycle, from development and introduction to growth, maturity, and decline, through various management strategies.
#1. Strategies for the Development Stage
The development stage requires a collaborative approach from various departments of a company in order to create a high-quality product to solve customers’ pain points. Not only the product development team but decision makers, marketing team, and other stakeholders must also participate actively.
You may discuss your plan with your team, listen to everyone’s input, and choose the best plan to approach the product’s development and other stages. This will determine the course of its life cycle.
Choose the right skills and talents in the development team and accumulate sufficient funds to sustain production, marketing, and other costs. You must also empower your workforce with advanced tools and techniques to accelerate production.
#2. Strategies for the Introduction Stage
When introducing the product in the market, you may want to do it in a small region initially. Assess how it performs there by taking into account the sales numbers and customer feedback. It will help you understand the underlying issues that customers are facing. Resolve them immediately and launch them in a wider area.
In this stage, you must strive to generate interest for your product in the eyes of your target customers. This requires awareness, effective marketing, and standing out from other brands and their products. You can do it with PR, influencer marketing, social media, etc., to get people talking about the product.
Moreover, try keeping your pricing competitive in your business segment. You can also offer free samples or trials of the product, special launch pricing, etc.
#3. Strategies for the Growth Stage
Marketing should be the biggest focus for companies when a product is in the growth stage. It’s when your product is popular and sales and revenue are growing significantly.
Create stronger marketing messages and make them reach your audience through different channels where the target audience can see them. It could be TV ads, YouTube ads, social media ads, etc.
Continue coming back before your audience so they choose you every time. Conduct proper market and consumer research before you enter the new market and set pricing strategically.
Furthermore, you can add more features to your product or release upgrades to align with growing technologies and meet audience needs. You can also work on other areas of your business, such as enhancing customer experience and resolving issues taken from feedback.
#4. Strategies for the Maturity Stage
With competition increasing significantly and market saturation, sales and growth slow down when your product reaches this phase. Thus, you must create strategies to extend the product’s lifecycle in order to keep the market share and continue making profits for the longest time possible.
For this, improve the product by working on its underlying issues and adding valuable features. You may revamp the branding and packaging to entice consumers. Consider reevaluating your marketing strategies and improving them. In addition, you may adjust pricing to drive sales while making profits. Provide attractive discounts and offers and enhance customer experience.
#5. Strategies for the Decline Stage
Since the product’s sales and growth are declining, a company must optimize the product distribution and sales channels while keeping losses to a minimum. You should also streamline your operations and customer service to ensure customers receive only the best product and service from you.
In addition, you may want to reduce your costs or provide more discounts and offers to boost sales. If you ask me, a company must not release product variations in this phase. Instead, you may try shrinking your coverage area, focusing only on profitable areas. Take more care of your loyal customers and give them reasons to trust you.
However, if the product is no longer profitable in the target market, you may discontinue it altogether. Or, you can move it to a different market where there is demand for your product.
Conclusion
I hope this article gives you some idea about the product life cycle and its stages so you can frame suitable strategies for your products. This will help you improve your sales, revenue, and customer loyalty.
Next, you may also explore some best PIM software for managing your product data effectively.
