All products go through a life cycle which is commonly term as Product Life Cycle. The end of the cycle for a product is known as the date when it is discontinued.
Products that are no longer made in existence, but have an existing market share and need to be supported by the company.
There are many stages in a product’s life cycle, and it is important for those who deal with marketing of products to know all the stages associated with this life cycle.
What is the Product Life Cycle?
The product life cycle is the process that a product goes through from its launch to being discontinued. It is divided into five stages: introduction, growth, maturity, saturation and decline.
It is an important concept for businesses to understand as it can help them make decisions about their products and investments.
The 5 Stages of the Product Life Cycle
Each stage of product life cycle has its own unique characteristics that will impact the marketing strategy used to promote the product. Let’s take a closer look at each stage.
- Introduction:
This is the stage where a new product is first introduced to the market. Sales are typically low during this phase as consumers are not yet aware of the product and need time to learn about it. - Growth:
During this stage, consumer awareness of the product increases and sales begin to grow. This is often due to aggressive marketing campaigns that create buzz around the product. - Maturity:
At this point, sales of the product have peaked and it has become well-established in the market. Companies typically focus on maintaining sales levels and improving profitability during this stage. - Saturation:
The market for the product begins to saturate and sales begin to slow. This can lead to a drop in prices, or add additional features at same price which can cause profits to fall. - Decline:
The subsequent stage is decline, when sales drop. A company may retain some value by evolving the product into its next generation or by converting it into a new product altogether.
Knowing which stage a product is in can help businesses make decisions about marketing, pricing, and investment.
For example, during the introductory stage, businesses may want to invest heavily in marketing to generate awareness of their product. During the decline stage, businesses may want to reduce their investment in the product as it is no longer generating significant revenue.
Why is the Product Life Cycle Important?
The product life cycle is important because it helps businesses to understand the stages that their product goes through, from development to decline. This understanding can help businesses to make strategic decisions about their product, such as when to introduce new features or how to price it.
The product life cycle also helps businesses to identify opportunities for growth. For example, if a product is in the decline stage, businesses may be able to extend its life by introducing new features or redesigning it.
Overall, it is a useful tool for businesses to understand the journey that their product takes from development to decline. This understanding can help them to make strategic decisions and identify opportunities for growth and profitability.
Conclusion
The product life cycle is an important concept for businesses to understand when launching new products.
By understanding the stages of the product life cycle, businesses can make better decisions about when to invest in marketing and promotion, when to cut prices, and when to exit the market.
The product life cycle is also a valuable tool for businesses to use when planning new product launches. By understanding how products progress through the various stages of the product life cycle, businesses can launch their products at the right time to maximize sales and profits.
