Introduction on the four (4) product life cycle stages.
Virtually everything on earth has a beginning and of course a possible end; and the same applies to product. At some point a man is given birth to, he them start growing gradually, he further develops into a fully grown man (maturity) and then eventually passes away. All of the above processes are what products faces when newly introduced into the market.
- The birth stage of a man – refers to when the product is launched into the market after series of research.
- When the man start growing – is the stage the initially introduced product has began to gain acceptance in the market by it’s target audience (growth stage) and is spreading gradually.
- As time goes on, human hits maturity – and this is the stage in the product life cycle stages the product is at is best.
- Eventually human passes away – and again this is stage in the four product life cycle stages the product start dropping figures due to lack of patronization.
The lack of patronization maybe due to the following factors
- Change in taste of the target audience,
- The introduction of similar product with higher quality by competitors; with more attractive package and its also very affordable. And a few more others.
The basic difference between a man and a product is pretty simple. A product can slowly fade away due to factors such as the introduction of similar product and the likes. A typical example of a product or service that has gone through all of these stages is BLUCBUSTER (an American film company); more on this will be shared in this article.
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What is Product Life Cycle?
PLC can be define as the study of the life time process of a product. it can also be viewed as the period of time over which an item is developed, brought to market and eventually removed from the market.
FOUR STAGES OF PRODUCT LIFE CYCLE
1. Introduction stage
The introduction/ introductory stage is the first of the product life cycle stages. And this is the stage in which the product is introduced or launched into the market for the very first time after prior research on all of its target audience. Of course a need as must have identified before the product creation but this stage still remains the most risky out of all the product life cycle stages. This is because the company or the marketers don’t know how well the product will do in the market. In essence, there’s a doubt if the consumers will appreciate and accept the product or not.
KEY FEATURES OF THE INTRODUCTORY STAGE
I. LOW SALES VOLUME:- Due to the fact that the product is just getting into the market, it’s impossible for it to record high sales. This is because many customers will like to purchase the product on trial (that’s in small quantity) to actually know it has all the necessary qualities or features.
ii. HIGH INVESTMENT OR COST:- The money invested at this stage in the product life cycle is always huge. Because the company’s or marketers will invest a lot to ensure the product is promoted properly in other to reach more audience. Not also forgetting the cost of production, tax, test marketing and other expenses.
iii. COMPETITION:- Like i said earlier there’s competitors at every stage in the product life cycle stages; however there will be little competitors at this stage because competitors are not fully aware of the to launch a competing one or modify their existing product.
2. Growth stage
Now the introduction stage is over and done with; this is the stage the product starts making significant improvement in the market. At the growth stage in the product life cycle stages, the product will start making better sales compared to the introduction stage. This is because consumers are now sure the product is good enough and they start buying in large quantity. A consumer who bought just one of your newly introduced beer last time is likely to buy two or three bottles this time because the product is now tested and trusted.
KEY FEATURES OF GROWTH STAGE
i. Increase in competition:- This is the stage your competitors are now aware of your product and because it’s growing signifies it’s a good product.
- competitors are now likely to make research in other to introduce similar product that will outrank yours.
ii. increase in demand
iii. increase in sales
iv. Product awareness increase in the public:- The saying goes thus, a satisfied consumer will/ is likely to come back. Aside that a satisfied consumer is likely to tell/ recommended the same product to family and friends. In other words a satisfied can be an advertiser. For example, if mr brown loved your bear the last time he tried it, he’s likely to recommend same to his co-workers; by so doing, the public awareness of the product is growing steadily.
3. Maturity stage
The early maturity stage is the stage every marketer or company will like to maintain for it product for ever.
- This stage is when the product records it’s highest sales volume.
- It’s also at this stage of the product life cycle stages the product has achieved total acceptance from it’s potential buyers; And this stage records a very high quantity of buyers returning to the product as solution to their needs/ problems.
FEATURES OF THE MATURITY STAGE IN THE PRODUCT LIFE CYCLE.
I. High competition:- This is the most competitive in all of the product life cycle stages; this is because lots of similar products are being introduced into the market by other organization.
- A well planned and research marketing strategy is needed during this stage to maintain position in market.
- Alterations and modifications of existing product to better satisfy your target audience is always a welcome idea; doing this will give a competitive advantage.
- You may also want to indulge in institutional advertising, sponsorship of entertainment and entrepreneurship shows to remain relevant and also attract more consumers.
II. Less cost:-The maturity stage records a relatively low cost in terms of all round expenditures; most especially for the company / marketer. The reasons is simply because the product is now established and there is increase in revenue.
III. Penetration pricing:- Organization tends to reduce the product price to maintain consumers and also fight off competitors. For example lets say your beer was being sold at $20 at growth stage; in some cases you will be forced to reduce the price to $15. This is because they’ll be lots of similar products being sold at that price or less. In essence, price penetration is a strategy adopted by organizations in other to break into the market with a low price and also push out competitors. You may need to adopted the same strategy to remain in the market by reducing your price. Or increase the quantity of your product while maintaining it’s quality.
- The aim of the organization is to extend the life cycle of the product. That’s why product alteration and modification is essential at this stage. example of product at this stage is coke. Introducing the zero coke from the main coke product has been a brilliant idea so far and this has kept them in the market.
4. Decline stage
The decline stage is also known as the saturation stage. And this is the stage in the product life cycle stages in which the sales and profit of the product is on the decrease. The reason for product decline maybe because all the customers who want to buy the product have all purchased it; or consumers are opting for similar product causing demand for your product to fall.
- During this stage expenses/expenditure is very likely to equal and in due time may likely exceed revenue.
- Therefore it’s advisable for you (the company) to neglect the product and focus on other projects; when it’s more likely the decline can’t be averted. However, the product can still be kept if only it will required Low Cost compared to revenue of production and promotion.
FEATURES OF THE DECLINE STAGE IN THE PRODUCT LIFE CYCLE
i. Low revenue:- There will be very low return of investment due to decline in sales.
ii. Market is saturated:- This simply means that there are lots of similar product with better features in the market leaving little or no room for your product to bounce back.
Note: in as much as the decline stage may appear as the end of the road, they are three (3) options the organization is left with.
(i) Engage in full rebranding and repackaging of the product. Doing this will extend the product life cycle as some customers will buy the product not knowing it’s something they’ve tried before. And it will also attract a few more individuals. for example, a product package with popular players with attract sport lovers, popular cartoon characters like ben 10 will do well with kids e.t.c.
(ii) Remove the product from the market entirely. There little to talk about. The idea thing is to stop further production of the product; and just try to sell out the existing one in the market.
That’s it on the last stage of the product life cycle stages.
WRONG FORMAT OF THE PRODUCT LIFE CYCLE STAGES EXPLAINED. (Read up to avoid making the same mistake)
In some text, you may come across or they may express the product life cycle stages in this format:-
In as much as the above product life cycle stages look or appear like the real deal, it has a particular issue argued by myself and other marketing experts; and the problem is the competition stage the format posses.
Every product at any stage in the market has competition. Be it in it’s introductory stage or maturity stage, there’s always a substitute to any product in the market. For example, lets say you happen to create a new type of soft drink which is ready for distribution to the target market; now your target market currently has other brands of soft drinks they are consuming before yours gets to them right? Of course they do. In essence, you’ll have to come up with a strategic format to make your target audience choose your newly introduce soft drink which is competing with already existing one’s in the market. In summary, the four product life cycle stage format which has the competitive stage is wrong and this is because all product faces competition no matter what stage they are.
Even if we assume your soft drink is the only available one in the market; That is, it has no competition; in little or no time, other organization (competitors) will discover the huge demand and of course profit and other benefit of the product. This will gear them into producing and introducing a competing product as soon as possible. Which ever way, there is no escaping competitors or competition in business.
Having said that, the correct format or generally accepted format of the product life cycle goes thus:-
- Introductory stage-Growth stage- Maturity stage-Decline stage.
continue reading for more information on all of the above four product life cycle stages with examples.
Now without wasting anymore time, lets go straight into the business of the day.
Summary of the four product life cycle stages
This chapter will be focused on the sales, cost, customer type, profits and competitors in each of the product life cycle stages.
However, first things first – meaning of PLC.
PLC simply refers to the study of the life span of product and its major purpose is to extend the stay of life span of the product in the market.
The product life cycles strategies marketers and business owners and big brands like COKE employ to ensure their product never hit decline stage.
What are the 5 stages of product life cycle?
Although the product life cycle stages format is generally accepted to be four (4) in marketing, further research has stressed on a possible extension by identifying product development as the first (1st) part or stage in the product life cycle.
This is because before a product is being introduced Into the market, a need must have been identified thanks to proper market research; Which developing a product to solve the initially identified needs is the next line of action. It’s actually after a successful product development, a product can be introduced into the market. Therefore the 5 stages of the product life cycle are
- Product development
1) The introduction stage is literally about the first time a product is launched / introduce into the market. it’s like when a child is given birth to.
- sales:- sales i this stage is very low. This is due to the fact that people know little or nothing about the product.
- cost are very high. Due to little or no sales, no substantial profit can be achieved at this product life cycle stage.
- The customers at this stage are called innovators. Innovators are individuals who basically like to be the first individuals to own a product. They are usually rich and rely more on impersonal sources of information. They can viewed as risk takers too…
- Competition at this stage is low; but there’s still competition because they are similar one’s (product) in the market.
2) Growth stage:- This stage is about the improvement the product is making in the market.
- Sales: There’s huge and rapid increase in sales at this stage compared to the introduction stage.
- There’s increase in profit at this stage
- Low/ average cost due to increase in profit.
- The customers at this stage is called early adopters. They are also quick to buy new product and services and are key opinion leaders to their friends and neighbours.
- Increase in competition.
3) Maturity stage: This stage in the four product life cycle is known for its…
- Increase in sales and high profit. this is because more customers are now aware of the product and repeat purchase is occurring.
- High competition.
- A relatively low cost is recorded at this stage.
- The type of customers at this stage are known to be the combination of early majority and late majority. Early majority are the type of consumers that look to the innovators and early adopters to see if a new product or idea works out pretty good and begins to stand the test of time. In essence, these type of consumers are the observing type. They tend to stay back and watch how the innovators and early adopters are coping with the product before buying it.
The late majority tends to purchase the product later than the average person. This type of consumers are hand to convince/ persuade into buying a new product.
4) Decline stage:- This is the last of the four stages of product life cycle. In summary, the decline of any product is due to lack of patronization and such arises when consumers have discovered similar product with better qualities.
- Sales in this stage is declining (downward slope)
- Profit is also declining or reducing
- Competitors are declining in numbers.
- The customers at this stage are called laggards. laggard are those who take very long period of time before purchasing a new product. some of them don’t even buy at all. laggards are usually of all the adopter categories. they also have strong brand loyalty for the innovation (new product) they adopt.
And that’s all on the four product life cycle stages with examples.
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