Key Points
- A product life cycle consists of 4 stages: Introduction, Growth, Maturity, and Decline.
- Business owners must rigorously are likely to their products during each stage of their life cycle.
- Understanding the product life cycle is important for successful product management and marketing.
Keen on learning more about product management and marketing? Keep reading to find easy methods to strategically manage your products through each stage of their life cycle.
You may walk right into a Ford dealership and buy an F-150, but you may’t buy a Model T. Considering in business terms, why is that the case? It’s since the Model T has already undergone the 4 stages of a product’s life cycle and eventually gave technique to emerging technologies in automobile manufacturing. Meanwhile, the F-150 remains to be making its way through its life cycle stages. It has reached market maturity—the F-series is the bestselling truck in America—however it hasn’t begun to say no.
Every product within the retail market goes through 4 product life cycle stages: the introduction stage, the expansion stage, the maturity stage, and the decline stage. Here’s an outline of those stages and a few product life cycle examples to learn from.
What’s a product life cycle?
A product life cycle is a time frame during which a product is introduced, experiences market growth, reaches maximum product sales, enters market decline, and ultimately leaves the marketplace. Business owners rigorously are likely to their products at every stage of the product life cycle. They nurture latest offerings in the course of the market introduction phase, push for improved quality and profits in the course of the growth and maturity phases, and strategically wind down the product in the course of the decline phase. Some large firms could have product team members specifically dedicated to product life cycle management.
4 stages of the product life cycle
The product life cycle model covers 4 distinct stages. Prevailing product life cycle theory says that every of those stages has defining characteristics that apply regardless of the product. The 4 stages are:
1. Introduction
This initial stage in a product life cycle involves introducing a brand new item or service to the general public and honing in on a goal market. During this stage, you educate the general public about your latest offering within the hope of winning market share. Profit margins could also be low—if not negative—since you’re probably spending more on manufacturing and marketing campaigns than you’re taking in from sales revenue.
Some entrepreneurs call the introduction phase the event stage, but that term could be misleading. The event stage occurs at the tip of a related process called the product development life cycle, or the cycle where a product goes from an idea to a prototype to a commercially available product.
2. Growth
In the expansion stage, each demand and competition pick up. This stage often involves ramped-up marketing investments, increased production, growing profit margins, and latest distribution channels.
3. Maturity
The maturity phase represents the height sales volume for a selected product. Ideally, that is essentially the most profitable stage within the product life cycle, with sales revenue exceeding expenses from marketing, manufacturing, and personnel. Within the best-run firms, maturity phases can last for years, if not a long time. It helps once you sell a product that individuals will at all times need more of, like tires or tissues. It also helps to have an expansive product concept, like a video game franchise that keeps rolling out sequels. Corporations remain of their maturity phase by conducting continual market research, soliciting customer feedback, and rolling out latest iterations of an existing product.
4. Decline
The ultimate product life cycle stage involves decline. Most products will eventually fade from the market, often on account of obsolescence and shifting consumer behavior. Decline stages also occur once you’re overtaken by a competitor with a greater value proposition, product quality, or marketing strategy. It’s possible for a product to enter the decline stage but not disappear entirely for a while.
What aspects can affect the product life cycle?
External aspects could make the product life cycle work as expected for some brands while throwing other brands for a loop. Some aspects that play a task include:
- Market saturation. Some firms struggle to transition from a growth phase to a maturity phase when the market is just too saturated with competitors. Brands with loads of investor financing can sometimes wait out this saturation stage, but others can have to fold for lack of market share.
- Technological advances. A product can grow robustly and reach its maturity stage, only to say no because emerging technologies have rendered it obsolete.
- Unsuccessful marketing. Great product design will not be enough to push an item to profitability. Sometimes the general public develops a brand preference for a competitor just because that competitor has a greater marketing strategy.
3 successful product life cycle examples
To grasp what makes the product life cycle essential to a growing business, examine some real-world product stories. Listed below are just a few success stories to learn from:
1. Bushbalm
Bushbalm has found great success with its range of “skincare for in every single place” products. Company co-founder David Gaylord points out that once you’re in the expansion stage of the product life cycle, you may expect marketing, shipping, and manufacturing to feed off of each other. Establishing support services for every of those components might help with a product’s growth stage.
“Should you’re the marketing person, but in addition the one who’s either shipping or making the product, the more you sell, the more work you may have to do on manufacturing or shipping,” Gaylord explained. “So, you realize in case you’re successful in marketing, your time goes completely to shipping and manufacturing.”
2. Queer Lit
Queer Lit is a UK-based bookseller that focuses on LGBTQ titles. Founder Matthew Cornford established the business as an online-only retailer. Cornford realized that to realize his ideal maturity stage, he’d need to regulate his business model. Specifically, he’d have to open a brick-and-mortar store in his hometown of Manchester. The takeaway? Sometimes you may have to pivot to graduate from the expansion phase to the maturity phase.
As Cornford explained, opening a physical store created the chance for “an in-face conversation with customers that they don’t need to have online. People need to are available and just discuss with you they usually need to open up. … Once you’re doing that online, that interaction just doesn’t occur in that way.”
3. Kai Collective
Kai Collective founder and fashion blogger Fisayo Longe amassed 50,000 blog followers before launching her first fashion line. Despite having an audience, the primary line of products didn’t sell as she’d hoped. “So I believed, OK, how can I give people what they need?” Longe said in an interview about debunking the parable of overnight success. “Let me really return to my roots and convey elements of my Nigerian heritage into Kai.”
The second launch proved to be wildly successful. “In 2020, we released our mesh marble Gaia print dress,” Longe said. “It’s develop into really popular—it sells out and it’s highly imitated now.” After learning from her first line’s relatively temporary life cycle, Longe reimagined her strategy, setting her products—and business—up for growth.
Product life cycle FAQ
How do businesses know when a product has entered the expansion stage of the product life cycle?
The expansion stage of the product life cycle traditionally involves branching out to latest markets, scaling up production, expanding marketing efforts, and hiring more staff. The expansion stage should provide more gross revenue than the introduction phase, however it may not provide more net profit since the business can have to take a position heavily in marketing and production.
What are some signs that a product is entering the maturity stage of the product life cycle?
Greater than anything, the maturity stage of the product life cycle is characterised by sustained profit. Products within the maturity phase of their life cycle usher in more cash from sales than the cash spent on operations and marketing.
Is the product life cycle the identical for all products and industries?
The product life cycle varies amongst different products and industries. Recent technologies, corresponding to solar energy and electric cars, might require a long time within the introduction phase before entering a period of growth. Items with sustainable customer demand, like certain food staples, can spend most of their existence within the maturity stage. When evaluating your individual product’s life cycle, it helps to directly compare yourself to others in your industry.
Can businesses successfully relaunch a product that has already reached the decline stage of the product life cycle?
Yes, products within the decline stage can experience a renaissance. This happens when customer behavior changes, corresponding to when Twenty first-century musicians took interest in somewhat forgotten synthesizers from the Seventies and Eighties.
