Product Life Cycle Different Stages With Examples (1000 Words )

Management and marketing experts use product life cycles to guide decisions on advertising campaigns, price points, entering new markets for their products, redesigning packaging, and more. Product life cycle management refers to these strategic techniques for supporting a product. They may also be able to predict when fresher goods may replace older ones on the market.

How a product is marketed to consumers depends on its many life cycle stages. When a product is introduced to the market successfully, it should experience an increase in demand and popularity, driving out competitors' older items. The marketing efforts decrease as the new product gains traction, and the related manufacturing and marketing expenses go down. If a product enters its decline phase and demand declines, it may be taken off the market and replaced, maybe with a more modern substitute.

Controlling the four life cycle stages can assist boost profitability and maximise returns, while failing to do so could result in a product underachieving its potential and having a shorter shelf life.

Stages

A product's life cycle has the following four stages:

Market Establishment and Growth

This stage of the product life cycle involves creating a market strategy, typically by spending money on marketing and advertising to inform consumers about the product and its advantages.

Sales typically lag at this point as demand grows. Depending on the intricacy of the product, how fresh and original it is, how well it meets the wants of the client, and whether there is any competition in the market, this stage may take some time to complete. The likelihood of a new product creation meeting client wants is higher, although there is ample evidence that products can fail at this stage, preventing the occurrence of stage two. Due to this, a lot of businesses choose to build upon a creative pioneer's work by updating an old product and producing their own version.

Expanding Market

When a product successfully completes the market introduction phase of its life cycle, it is prepared to go on to the growth phase. An increase in production and wider distribution of the product should result from rising demand.

As the product takes off, the gradual expansion of the market introduction and development stage abruptly changes to an upturn. During this time, rival companies might enter the market with their own variations of your product, either as exact replicas or with minor changes. Since consumers have more options, branding becomes crucial to maintaining your position in the market. In the face of escalating competition, product pricing and availability in the market become crucial elements to maintain sales. The third stage of the life cycle, market maturity, begins at this moment.

Market Development

The price of creating and selling an existing product will go down at this time because the product is already well-established in the market. The beginnings of market saturation are evident as the product life cycle enters this advanced stage. After a large number of customers have purchased the product and competitors have emerged, branding, price, and product difference become even more crucial to maintaining a market share. Retailers will become stockists and order takers rather than attempting to market your goods as they might have in stage one.

Market Recession

The life cycle will eventually start to diminish as competition increases and other businesses try to imitate your success by adding more features to their products or lowering their pricing. Another factor that contributes to decline is when new developments replace your current product. For example, horse-drawn carriages fell out of favour when the automobile replaced them.

When there is no longer any opportunity for profit due to market saturation, many businesses will start to move on to new endeavours. Of sure, some businesses may endure the downturn and keep selling the goods, but manufacturing will probably be on a smaller scale, and costs and profit margins may decrease. Customers may also abandon a product in favour of a fresh substitute, however this can occasionally be reversed when previous trends and fashions resurface to spark interest in a discontinued item.

Product Life Cycle Management and Strategy

A properly managed product life cycle strategy can assist in extending the shelf life of your product.

The pricing phase of the plan starts as soon as the market is introduced. There are also options like "price skimming," where a high initial price is set and then dropped to "skim" different consumer groups as the market expands. As an alternative, you can choose price penetration, in which case you set the price low initially in order to capture as much of the market as possible rapidly before raising it once you've established yourself.

Both product packaging and promotion must be appealing to the target market. In order to expand your cash stream, it's also critical to sell your product to new demographics.

Moreover, products may become obsolete or need to change to accommodate shifting customer needs. Netflix is one company that did this, switching from DVD rental delivery to subscription streaming.

Understanding the product life cycle enables you to continually reinvent and innovate an existing product (like the iPhone) in order to rekindle demand and extend the product's shelf life.

Examples

Due to shifting consumer demands or the arrival of new inventions, many items or brands have seen a downturn. Several industries run in many product life cycle stages at once, such as the televisual entertainment sector, where flat-screen TVs are in their mature stage, on-demand programming is in its growth phase, DVDs are on the decline, and video cassettes are now largely redundant. Many of the world's most popular products maintain their mature state for as long as possible, with just minor upgrades and redesigns coupled with fresh marketing efforts to keep them in consumers' minds, like with the Apple iPhone.

Conclusion

Companies may determine whether their goods are meeting the needs of the target market by understanding the life cycle of a product. This knowledge enables them to determine when they may need to shift their focus or produce something new.

A corporation can change its product focus to retain longevity in the market by evaluating a product in relation to market needs, competition, costs, and profitability.

Understanding when a product is declining helps your business avoid being overly dependent on a dwindling market. According to a product life cycle strategy, you can revamp a current product, create a new replacement product, or take a different path to keep up with a shifting market.

While every product has a lifespan, many of the most popular ones can stay in the mature stage for a considerable amount of time before eventually declining.