Product life cycle phases refers to the period of time over which an product is developed, brought to market and eventually removed from the market.
…It can also be defined as the typical stages the product goes through during it’s lifetime.
The Four (4) Product Life Cycle Phases In Marketing
Phase 1. Introduction
The introduction stage is the first of the product life cycle phases…
And this is the stage in which the product is launched into the market for the very first time after prior research on the need of the company’s target audience.
Despite the fact that a need must have been identified before the product creation and introduction, this stage still remains the most risky out of all the product life cycle stages.
…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 PRODUCT LIFE CYCLE INTRODUCTION PHASE
- 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.
- HIGH INVESTMENT OR COST
The money invested at this stage is always huge. The company or marketers will invest a lot to ensure the product is promoted properly in other to reach more audience.
Not forgetting the cost of production, tax, test marketing and other expenses.
- LOW COMPETITION
The little competition at this stage is as a result of the following:
Firstly, Competitors are not fully aware of the product to launch a competing one…
….or modify their existing product to match or better the newly launched product.
And when eventually a few becomes aware…
Secondly, they may feel reluctant to take action by creating a competing one as they’ll rather prefer to monitor the progress of the product for now.
Such is often the case when they (competitors) want to be sure the product will do well in the market — as they wouldn’t want to take unnecessary risk.
- Technical problems
Especially in the tech industry where new technologies are developed.
Boone & KURTZ who authored the 11th edition of the book contemporary marketing used wireless web as an example.
In their words “when it was introduced, the idea of using phones and handheld computers to check email and perform other tasks on the internet sounded like a sure hit. But the reality proved to be less promising. The equipment was hard for the average consumer to figure out, connections were often cut, and tiny handled screen were just too hard to read…”
Phase 2. Growth
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 phases, 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’ll start buying in large quantity… after initially buying on trial at the previous.
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 PRODUCT LIFE CYCLE GROWTH PHASE
- Increase in competition
More competitors will now be aware of your product and because it’s growing, signifies it’s a good product.
Therefore, they are now likely to make research in other to introduce similar product that will outrank yours.
- increase in demand
This stage records a higher percentage product demand when compared to the previous stage.
- Increase in sales volume
When the organisation is able to match the high demand, it leads to more sales automatically.
- Additional spending
Due to the increase in competition, the company may need to spend more on promotions and distribution when necessary.
Doing this is key to remain competitive in the market by reminding the potential buyers to buy the product… and for the actual buyers to repeat purchase.
The spending on distribution is to make it available where and when it’s needed by them.
Phase 3. Maturity stage
The early maturity stage in the product life cycle phases is the stage every marketer or company will like to maintain for it product for ever.
- Here is when the product records it’s highest sales volume.
- It’s also at this stage of the product life cycle phases the product has achieved total acceptance from it’s actual buyers
- And this stage also records a very high percentage of buyers returning to the product as solution to their needs/ problems.
At some point a company’s product remains stagnant and the buildup of customers begins to shrink.
This is because many competitors are now in the market, and the firm’s profits will begin to decline as competition increases.
CHARACTERISTICS OF THE MATURITY STAGE
- High competition
This is the most competitive in all of the product life cycle phases…
…because lots of similar products are being introduced into the market by other organization.
To ensure success…
- 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.
- Less cost
The maturity stage records a relatively low cost in terms of all round expenditure because the product is now established and there is increase in revenue.
- Reduced cost per unit.
Organization tends to reduce the product price to maintain consumers and also fight off competitors… and to remain competitive, you might also want to do same.
Or increase the quantity of your product while maintaining it’s quality for the same price.
The kicker here is this:
- 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.
Phase 4. Decline
The decline stage is also known as the saturation stage.
It is often as a result of change in innovations or shifts in consumer preference.
This is the stage in the product life cycle phases in which the sales and profit of the product is decreasing.
Other reasons 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 revenue and in due time may likely exceed it.
- 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.
- Nevertheless, the product can still be kept if only it will require Low Cost compared to revenue of production and promotion.
CHARACTERISTICS OF THE DECLINE STAGE IN THE PRODUCT LIFE CYCLE PHASES
- Low revenue:- There will be very low return of investment due to decline in sales.
- 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.
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.
- Engage in full re-branding 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.
- Remove the product from the market entirely
Another option is to stop further production of the product; and just try to sell out the existing one in the market.
- Continue with the product
The idea behind this strategy is with the hope that your competitors who are likely to be in similar situations will remove their product from the market while you remain the LAST MAN STANDING.
For more the best strategies to adopt on each product life cycle stages or phases, you may want to check out this guide.
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What is Product Life Cycle Phases?
Product life cycle phases can be defined as 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.
Which product life cycle stages is the most important?
All product life cycle stages are 100% important.
But if I am to pick a particular stage that I perceived to be more important, I will go for the maturity stage. The reason for this is because It is the stage 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 actual buyers. And this stage records a very high quantity of buyers returning to the product as solution to their needs/ problems.
That’s why a flop at this stage will lead to a possible decline.
But in all sincerity, all of the product life cycle phases/stages are important.
If your product is introduced well, it’s likely to grow and also mature in the market… then you adopt the necessary strategies to avoid hitting decline.
Secret product life cycle strategies marketers and big brands employ to ensure their product remain relevant in the eyes of their target audience.