A product life cycle is a product lifespan that starts when a brand introduces a product to the market and ends when it declines. It consists of 6 stages and helps marketers take strategic decisions like price reduction, new market reach, growth in advertising campaigns, or redesigning a product’s packaging.
In this article, we’ll review the importance, 6 stages of the product life cycle, and some outstanding examples. We’ll also unveil the main areas of application.
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 yet 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 after 2005 when CDs appeared on the market. It demonstrates that any product can become obsolete. To prevent this happen fast, you need to track the product cycle and implement new helpful strategies.
A product life cycle is a period during which the product exists in the market, the moment when it experiences ups and downs. It has 6 main stages. These phases are crucial for management and marketing teams. The product life cycle is vital since it predicts the product’s future and helps in decision-making. After analyzing the stage, marketers can figure out their next strategic step. It allows marketers to 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 planning the next marketing steps. A certain phase allows marketers to develop approaches for product development, overcome competitors, and win more customers. With awareness of a product life cycle, marketers can control sales, demand, and product availability. As a result, businesses can decide whether they need to drive sales by running new marketing campaigns or ads on social media. Besides, the stage of a product indicates whether there’s a necessity to change the product’s pricing.
Now that you know the reasons to keep an eye on your product life cycle, let’s look at the 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 the product life cycle into 6 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. So let’s begin!
- Development. Before introducing your new product to the target audience, research everything carefully: your ideal customer, market, competition, and other important factors. During this stage, you can’t make any profit. Companies only invest in their product hoping to recoup the expenses and gain huge revenue after the launch. However, before it happens, you need research. Companies test product effectiveness, create prototypes, and develop strategies for product launch.
- Introduction. It’s a phase when you launch your product and present it to your potential customers. Marketers work on establishing product awareness and winning the attention of prospects. This stage entails creating ads and marketing campaigns to hook the audience and drive sales. There’s no need to expect high revenues during this stage since sales and demand are low. However, once more people know about the product and appreciate its benefits and quality, the product will jump into the growth stage.
- Growth. This phase indicates the interest and awareness of customers about the product. The item looks enticing for consumers, and they buy it. Demand for the product grows, and it drives the brand’s profits. A brand can conquer other markets to attain more customers and ROI in the growth stage. The competition rises too. Since more businesses want to join the market, competition becomes more aggressive.
- Maturity. During this period, sales tend to fall. At the same time, the competition does not decrease, and other companies offer a better product at a lower price. To stay competitive, the company reduces the price of its product. The main benefit of this stage is that the business owner is already aware of the mistakes made in the previous phases. The brand can eliminate the problems, use resources efficiently, improve product features, low prices, and provide customers with products in different locations.
- Saturation. At this stage, companies don’t observe big ups or downs in their sales volumes. Yet, the problem is that competitors begin to participate in the market. Companies take different measures to keep afloat and avoid entering the decline stage. They need their product to become customers’ favorite.
- Decline. If the company doesn’t succeed in taking the position of a preferred brand in the market, it enters the decline phase. Sales volume reduces, and profits experience a decrease. Besides a decline in sales, the brand suffers from increased competition and more modern products. The product fades into the background as new substitutes appear.
The steps are clear now, so let’s walk you through the guide on using the product life cycle.
How to use a product life cycle?
You can use the stages of a product life cycle to reach different objectives. Being aware of your product life cycle means a lot for your business. If you keep track of it, 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. Introduce your product as an excellent substitute for the previous item. Describe its features and benefits that might interest customers. This way, you’ll be able to make your brand grow little by little. However, if you have an already established product, you can show customers that they can trust your company since the product has had an amazing reputation during all these years.
- Develop an effective marketing strategy. Sometimes it can be confusing to decide which strategy to implement. Yet, it's easy when you know the stage of your product life cycle. It plays a crucial role in the type of content you provide to your customers. The content you choose for the introduction stage can’t be the same as that you publish during saturation.
- Take actions to prevent a product from reaching a decline. Since dozens of new products emerge in the market, different types of goods can become obsolete. Sometimes it can be very difficult to stay competitive and keep up with the times. However, brands can still slow down the decline process. A company can discuss implementing a new strategy before entering the saturation or decline stage.
- Set the prices. The pricing of your product depends on the stage in the product life cycle. The product's price is usually low in the introduction stage, whereas it can be high in the maturity stage. It depends on the demand for your product and customers’ awareness. The more people know you have a good product, the more people will buy it for any price you set. Yet, 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. You’ll be able to encourage word-of-mouth promotion.
Now that you know how to use a product life cycle to your benefit, let’s proceed to the examples. They’ll demonstrate the life cycles of products that were popular decades ago. We’ll review their cycles from development to decline.
Examples of Product Life Cycles
It’s time to look through some products that are no longer on sale. With their help, you’ll get to know the features of each stage and how products reach the decline.
You remember switching lots of national and foreign channels to find a movie or a TV series you’d like to watch. However, now you can say for sure that those times are in the past already. There’s a big possibility that some small children don’t even know about cable TV. Yet they know Netflix, Amazon Prime, and Hulu. The reason why cable TV is no longer popular is that it has entered the decline stage. There are many causes for this purpose: the emergence of new strong competitors, an excellent choice of movies and TV shows, the opportunity of a viewer to choose the movies, etc. 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 next phase called the introduction. This stage is associated with the moment when the commercial television system was presented to the public. After decades, cable TV gained growth and popularity. It happened in the 1980s when more than 15 million families had cable. In the 1990s, cable TV entered the maturity stage. The majority of families had cable.
The start of the 21st century is the period when cable TV reached the peak of its popularity. The market became more crowded with new emerging competitors, and they offered more attractive and modern products like HDTV. This was a saturation stage. Cable TV reached its decline in 2015 when Netflix hooked the audience with its latest movies.
Portable cassette player
A cassette player is another wonderful example of a product that isn’t in use right now. People used the player to listen to the recorded songs. The development of the product happened in the 1950s when different companies were working on the most appropriate form of a player. The first convenient portable cassette player was introduced to customers in 1979. Once it was introduced, the product sold well and experienced growth. It hit 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 the music from cassettes. It happened in 1979. The portable cassette player declined, and CDs surpassed it in the 1990s.
To keep abreast of the changes with your product, you need to track the product life cycle and its stages. Hope our information will be useful to you to successfully present your product to customers and effectively lead it through all of the phases.
- This article defines the term and provides readers with examples.
- In this article, you’ll find the stages of the product life cycle and some outstanding examples.
- In this article, you’ll find out how to use the product life cycle.
Last Updated: 12.01.2022