The product life cycle is the amount of time a product spends in the market from birth, from inception to the decline or expansion of the product. The product life cycle is directly correlated with the time, sales, and growth spent on each stage of the product life cycle.
What are the Product Life Cycle stages?
The product life cycle is the amount of time a product spends in the market from birth, from inception to the decline or expansion of the product. The product life cycle is directly correlated with the time, sales, and growth spent on each stage of the product life cycle.
What are the Product Life Cycle stages?
1. Product Development
Product development stage is identifying customer need or problem, market research, competitor analysis, identifying potential growth, testing and validating assumptions, and translate into a minimal viable product.
Customer expectations
Product strategy
Building requirements
Investment costs increases
High development time
Testing prototypes
2. Introduction
At this stage a product is launched in the market. Companies spent time and invests in building customer awareness, marketing, promotions, and placement of the product.
Target early adopters
Slow sales growth
Pricing strategy
High costs
Distribution model
Brand building
3. Growth
The stage of the Product Life cycle where product sales, revenues and profits begin to grow as the product becomes more popular and accepted the market.
Promoting product
Economies of sales
High sales and revenue
Increase in competition
Gains customer acceptance
Maintaining product quality
4. Maturity
The stage in the product life cycle where product reaches its maximum potential, gained extensive acceptance, competition is high, and sales stabilizes.
Product gets saturated
Profit margin decreases
Tough competition
Price war
Differentiation in marketing
Product development
5. Decline
At the end of Product Life Cycle the sales of the products will decline. This can be due to changing customer needs, new trends, technological advances, innovation, and competition.
Sales growth becomes negative, profits decline
Distribution channel slows down
Product loses customer appeal
Competition remains ahead
Product will get retire
Minimal marketing
Product Extension
When a product reaches decline stage, companies may decide to withdraw completely from the market. Or restart the product life cycle to continue the success. This is called Product Extension in the product life cycle model. Extension strategies are marketing techniques designed to extend a products life cycle and delay its decline.
Changing product design
Product diversification
Entry into new markets
Finding new uses
Conclusion
The product life cycle stages explain the changes in sales and profitability of products over their lifespan. To improve profitability and market positions, product managers need to use appropriate strategies for each life cycle stage.
Hina Kamra, Amazon Sr PM