A product life cycle is a product lifespan that starts when a brand introduces a product to the market and ends with the product’s decline. This cycle consists of 6 stages and helps marketers make strategic decisions regarding price reduction, reaching out to customers in a different market, advertising campaign growth, or redesigning products’ packaging.
In this article, we’ll talk about the importance of a product life cycle and discover its six stages. We will also review some outstanding examples of product life cycles and talk about where they can be implemented.
Why is a product life cycle important?
Our world and the products we encounter every day change fast. In 1963, the famous company Philips introduced a tape cassette. The big production of blank and prerecorded cassettes started in the 1960s but reached the peak of its popularity only in the 1980s. It was the most convenient way for people to listen to music. However, everything changed when CDs appeared on the market in 2005. What this demonstrates is that any product can easily become obsolete. To prevent this from happening fast, you need to track your product cycle and implement new strategies.
A product life cycle is a period during which a product is on the market and experiences ups and downs. This cycle has six main stages, all of which are crucial for management and marketing teams. Evaluating your product life cycle is vital since it predicts your product’s future and helps in decision-making. After analyzing the current product life cycle stage, marketers can figure out their next strategic steps and decide whether a product needs more advertising, a lower price, or a new package design.
Every stage of a product life cycle is a guideline for your next marketing steps. Breaking product sales cycles into stages allows marketers to develop more elaborate product development approaches, overcome competitors, and win more customers. This way, marketers can control sales, demand, and product availability, and businesses can decide whether they need to drive sales by running new marketing campaigns or ads on social media. Besides, product sales cycle stages indicate whether there’s a necessity to change products’ pricing.
Now that you know the reasons to keep an eye on your product life cycle, let’s look at its stages. Keeping them in mind will enable you to control the status of your product in the market.
6 Stages of a Product Life Cycle
We can break down any product life cycle into six main stages. We’ll look through each of them thoroughly to figure out what to do to improve your product’s profitability, efficiency, and success.
- Development. Before introducing a new product to your target audience, analyze your ideal customer, market, competition, and other weighty factors. During this stage, you can’t make any profit and should only invest in your product to recoup your expenses and gain huge revenue after the launch. However, before it happens, you need to do some research and test your product’s effectiveness, create prototypes, and develop strategies for product launch.
- Introduction. This is the stage where you launch your product and present it to your potential customers. Marketers work on establishing product awareness, winning prospects’ attention, and creating ads and marketing campaigns to drive sales. Don’t expect high revenues during this stage since sales and demand are low. However, once people discover your product and get to appreciate its benefits and quality, the product will jump into the growth stage.
- Growth. This stage is all about customers’ product awareness and interest. During this time, product demand starts to grow, driving brands’ profits. Companies can conquer other markets to attain more customers and ROI in the growth stage. Still, the competition becomes more aggressive since more businesses want to join the market.
- Maturity. During this period, sales tend to fall. At the same time, the competition does not decrease since other companies offer better products at lower prices. The main benefit of this stage is that you are already aware of the mistakes you made during previous phases and can eliminate them, allocating resources efficiently, enhancing product features, setting lower prices, and making your products more accessible to customers.
- Saturation. At this stage, companies don’t observe big ups or downs in their sales volumes. At the same time, competitors become more active on the market, so you need to keep afloat and avoid entering the decline stage. You need your product to become customers’ favorite.
- Decline. If a company doesn’t succeed in becoming a preferred brand on the market, it enters the decline phase. Sales volume reduces, and profits experience a decrease. Besides a decline in sales, brands also suffer from increased competition and newfangled product alternatives.
Now that you know more about product life cycle stages, let’s discover how your brand can benefit from analyzing your product life cycle.
How can you make use of product life cycle analysis?
Being aware of your product life cycle stage means a lot for your business, as it allows you to tweak your strategies as you go. If you keep track of your product life cycle, you can achieve the following goals.
- Gain authority in the marketplace. If you decide to introduce your completely new product to the market, you need to build awareness. Although it’s not an easy task, try to do it with advertising and introduce your product as an excellent substitute for its predecessor. This way, you’ll be able to make your brand grow little by little. However, if you have an already established product, you can leverage its long-standing reputation to show customers that they can trust your company.
- Develop an effective marketing strategy. Sometimes it can be challenging to decide which strategy to implement next. Luckily, knowing the stage of your product life cycle makes it easier. Since the content you choose for the introduction stage can’t be the same as for your saturation stage, analyzing your current product life cycle can help you determine the type of content you should provide your customers with.
- Take actions to prevent a product from reaching its decline. Even though it can be daunting to stay competitive and keep up with the times, brands can still slow down the decline process and prevent their products from becoming obsolete too quickly. For instance, discussing new strategies before entering the saturation or decline stage is an excellent idea.
- Set the prices. Your product pricing should depend on the current stage of your product life cycle. Product prices are usually low during the introduction stage and high during the maturity stage, though customers’ product awareness and demand are also driving factors at play here. If people know you have a good product, they will buy it for any price you set. Still, if you have just entered the market, there’s a point in lowering the prices so that customers can afford to buy your new product, encouraging word-of-mouth promotion.
Now that you know how to use product life cycle analysis to your benefit, let’s review some product life cycle examples from a few decades ago — from development to decline.
Examples of Product Life Cycles
We will look through the life cycles of products that are no longer on the market. With their help, you’ll get to know the peculiarities of each stage and find out how products reach their decline.
Do you remember how disheartening it felt to have to switch a ton of channels before you find a movie or TV series you could watch? Well, now those times are for sure in the past. The reason why cable TV is no longer popular is that it has entered the decline stage. Streaming services like Netflix, HBO, and Hulu have become major competitors to cable TV, eventually turning it obsolete. Let’s discuss each stage of cable TV’s life cycle.
The development stage of cable TV started in the first half of the 20th century. In 1950, it moved to the introduction stage — this was the moment when the commercial television system was presented to the public. After decades, cable TV gained growth and popularity in the 1980s, when more than 15 million families had cable TV. In the 1990s, cable TV entered its maturity stage.
The start of the 21st century is the period when cable TV reached the peak of its popularity. The market became crowded with new emerging competitors, and they offered more attractive and modern products like HDTV — this was the saturation stage. Cable TV reached its decline when Netflix hooked the audience with its up-to-date features and latest movies in 2015.
Portable cassette player
A cassette player is another wonderful example of a product that isn’t in use right now. People used portable players to listen to recorded songs. The development of the product happened when different companies were working on the most appropriate form of a player in the 1950s. The first convenient portable cassette player was introduced to customers in 1979. Once it was launched, the product sold well and experienced growth, hitting its peak in the 1980s.
Although cassette players sold well in their saturation stage, new rivals started winning customers’ attention. The product was no longer in demand when CDs were invented, and people no longer wanted to listen to music using cassettes in 1979. The portable cassette player declined, and CDs surpassed it in the 1990s.
To keep abreast of your product changes, you need to track your product life cycle and its stages. Hope this article helped you figure out how to present your product to customers and effectively lead it through all its life cycle stages.
- This article defines the term and provides readers with product life cycle examples.
- In this article, you’ll discover more about product life cycle stages and find some outstanding examples.
- In this article, you’ll find out how to use the product life cycle marketing model.
Last Updated: 03.05.2023