All products have a typical lifecycle that follows consistent stages from introduction to maturity and eventual decline. By understanding where a product sits within its lifecycle, businesses can make better strategic decisions about things like marketing, pricing, and research & development. This article will break down the key stages of a product lifecycle model and discuss what typically happens at each phase.
Stage 1: Product Development
The first stage is Product Lifecycle Management where a company invests time and resources into conceiving, designing and testing a new product idea. For consumer packaged goods, this stage may involve formula creation in a lab. For technology, it involves coding prototypes and testing functionality. The goal is to have a minimum viable product ready for market introduction with refined features based on user feedback and market research. Businesses will spend heavily on R&D during this time to ensure product-market fit.
Stage 2: Product Launch
Once development is complete, the product is launched into the market. This is a critical stage where first impressions are made. Companies devote significant attention to product launches through marketing campaigns, trade shows, promotions and building initial sales velocity. The objectives are to achieve high sales volumes quickly to reach scale and gain consumer awareness and trial. Pricing is usually at premium levels to gain a healthy sales margin given high production costs at low volumes during launch.
Stage 3: Growth
If the product launch is successful in gaining consumer traction, the growth stage follows as sales increase rapidly. Distribution expands into new retail channels and geographies. Marketing stays focused on growing brand awareness and market share while driving repeat purchases. Production costs decrease as volumes increase, allowing for lower prices to spur further growth. Continuous product improvements are made based on consumer and market feedback to sustain that growth. Market research helps identify new target segments for future expansion as well.
Stage 4: Maturity
Eventually sales growth plateaus as the product reaches maturity in its category and market. Most potential customers who want the product already have it. The total available market is reached. During maturity, competition increases as others enter the category and brands and private labels proliferate. Margins fall due to saturation and greater price competition. Innovation switches to new features for brand loyalty rather than growth. Companies focus on customer retention through high quality service.
Stage 5: Saturation
As innovation plateaus and competitors catch up, the market becomes saturated with very similar products. Incremental growth is difficult to achieve and total sales may peak before entering a gradual decline. At this stage, heavy promotion and discounting is required just to maintain sales volumes. Margins shrink further and some companies may exit the market entirely if they cannot adapt. Those that stay invest in substantial redesigns or move on to new and related categories.
Stage 6: Decline
Eventually demand declines outright as the product loses relevance due to shifting consumer tastes, technologies or regulations. Sales decrease year-over-year despite best efforts. Companies have to decide whether to milk the remaining value through lower costs or dispose of the asset through liquidation. For some stable brands, select markets or product lines may continue on with smaller niche appeal while the overall product transitions out of the mainstream.
Strategic Implications
Understanding where a product sits in its lifecycle guides important business decisions. Young products require heavy development and marketing investments for growth, while mature products demand a focus on retention, innovation and margin optimization. As sales inevitably decline, resources must be reallocated to the next generation of offerings. By planning for lifecycles, companies can ensure a steady pipeline of new product launches to replace revenues as others go obsolete. Strategic portfolio management is key to sustained long-term success.
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About Author:
Vaagisha brings over three years of expertise as a content editor in the market research domain. Originally a creative writer, she discovered her passion for editing, combining her flair for writing with a meticulous eye for detail. Her ability to craft and refine compelling content makes her an invaluable asset in delivering polished and engaging write-ups.
(LinkedIn: https://www.linkedin.com/in/vaagisha-singh-8080b91)
Overlooking important steps and simple mistakes are what leads to the failure of a product launch.
Know your target audienceYour product might really be revolutionary, however, if it doesn't find the right audience, the rocket has crashed even before leaving Earth.
Research more about this particular group of consumers to ensure maximum sales.
Always go overboard with campaigning and promotions because it will only add more to the sales.
Schedule everything, every milestone in the launch, and all the steps leading to the final stage.Bring in brand ambassadors and public icons to give a new face to the product launch.
The reach you desire for your products should never be less.
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