The product life cycle is a concept used to describe how a product’s sales evolve from its launch onto the market through to its eventual withdrawal. The term is essentially an analogy to the human life cycle, and in the same way, it helps companies pinpoint which stage a product is currently in.
While this might sound irrelevant, the truth is quite the opposite: it gives companies a better basis for making decisions about their business.
That’s what makes it an indispensable tool for business managers and basic knowledge for anyone interested in marketing.
Why the product life cycle matters in marketing
While the product life cycle doesn’t have a direct effect on how companies actually sell their products, it does help specialists build a plan that lets them visualize the product’s full trajectory.
Knowing which stage a product is in also helps decide what moves to make to keep it afloat, or, failing that, to pull it from the market. It’s worth noting that the model relies on the judgment of senior management, so they need to be very careful when determining which stage the product is actually in.
It’s not a perfect process either, and it has certain shortcomings, such as lacking a set timeframe for how long each stage lasts, and it doesn’t help calculate profits and losses. Even so, it has plenty of benefits, which is why it’s worth understanding and using correctly.
What are the stages of the product life cycle?
Essentially, a product life cycle has 5 stages: Development, Introduction, Growth, Maturity, and Decline:
Development
Many companies tend to skip this stage even though it’s one of the most important. This is where specialists have to turn their ideas into something practical and give them features that make the brand stand out. The product can be anything you can imagine, from a chair to a cosmetic, but the most important question to ask yourself is: what can it offer that’s better than what other companies offer? That’s the key point to address during the development phase.
Introduction
This is the moment when the consumer and the product interact for the first time. It’s one of the key moments, since demand will generally be lower than supply. So during this phase, it can be worth running major promotions to introduce it to a general audience with temporary discounts and similar offers.
Growth
Once the previous phase has been cleared, profits start to appear and the product starts to become better known. So, unlike the previous stage, demand will now exceed supply. Not everything is positive, though, since this is also where rivalry with other companies offering similar products starts to show up.
Maturity
This could be considered the longest period a product will go through, since it’s during this stretch of its life that profits and orders become steady, until they reach a point where they level off, opening the door to the final stage.
Decline
This is the moment companies try to avoid at all costs, because the product stops being profitable, which results in losing its consumer base. Losses become evident, and the product has to be pulled from the market. That said, it doesn’t necessarily have to happen exactly like that, since in many cases the product could be redesigned to try to stay in the market.
What methods can extend a product’s life cycle?
“Decline” could be considered a product’s death, so companies will always do everything they can to keep that stage from arriving. While there’s no universal method, there are several ways to keep a product fresh. This is necessary most of the time, since you have to take into account that the market is constantly evolving and consumer needs change, which makes it easy for a product to become obsolete.
That said, it’s easy to stay in the game by innovating while also giving a fresh perspective to what you offer. This can mean either creating new advertising campaigns, or including new features that serve as added value on top of what the product already offered at the start.
Throughout the entire product life cycle, you need to take the consumer’s opinion into account whenever you make any move or change, always aiming to generate real value and a genuine benefit in their everyday life. That way, you can keep building loyal customers who trust your brand.
How does the product life cycle work?
While the stages we described above are present in every product on the market, they can vary depending on the product itself. The longest-lived products are consumables, which can survive for decades with ups and downs in the market. Many companies have even relaunched a product after previously discontinuing it, repositioning it in the market for many more years. Retro products would fit here too, for example.
On the other hand, in a society that’s fully immersed in technology, there are always new advances leaving important products behind. That’s why large companies like Apple tend to update almost constantly. That said, you also have to be aware of when you’re reaching a dead end, where further investment will only generate major losses for the company, and get out before that happens.
What’s the point of redesigning a product?
Redesigning a product that’s already been launched means increasing the number of benefits it offers, as well as changing certain features to reach a wider audience. In other words, it means creating a nearly new product from an existing base structure, which means going through the life cycle again rather than simply extending the maturity stage.
This is a fairly risky bet, since a new version of the product could raise customer expectations and create pressure to outdo its predecessor. This happens constantly in the tech market. In some cases, companies simply launch it as a new version without discontinuing the previous product. On the other hand, though, this could create a situation of self-competition.
