Product life cycle stages In marketing refers to the period of time over which an item is developed, brought to market and eventually removed from the market.
The product life cycle is broken down into four different stages which means the process is in four different/independent stages which are the
- Introductory stage,
- Growth stage
- Maturity stage and
- Decline stage
They are further popularly referred to as the four product life cycle stages in marketing.
The Four Product Life Cycle Stages In Marketing Explanation
1. Introduction stage (explanation and characteristics)
The introduction/ introductory stage is the first of the product life cycle stages.
And this is the stage in which the product is launched in the market for the very first time after prior research on all of its target audience. Despite the fact that a need must have identified before the product creation and introduction, 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 IN MARKETING
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. LOW COMPETITION:- little competition at this stage is as a result of the fact that 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.
Although a couple of competitors might be aware of the product launch, in most cases 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. This is another reason why the competition at the introduction stage of a product is usually low in most cases.
iv. Technical problems: Especially in the tech industry where new technologies are birthed. 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…”
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 in marketing, 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 CHARACTERISTICS OF GROWTH STAGE IN MARKETING
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
This stage records a higher percentage on demand of your product compare to the previous stage.
iii. Increase in sales volume
This is so because when you’re able to match the high demand, it leads to more sales automatically.
iv. Additional spending: Due to the increase in competition, the company may need to spend more promotions and distribution when necessary. Doing this is key to remain competitive in the market by reminding your potential and actual buyers about your product; and also making it available where and when it’s needed.
3. Maturity stage
The early maturity stage in the product life cycle 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.
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 firms profits begin to decline as competition increases.
CHARACTERISTICS OF THE MATURITY STAGE IN MARKETING.
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. It is often as a result of change in innovations or shifts in consumer preference.
At this product life cycle stages in marketing, the sales and profit of the product is on the decrease.
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 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.
KEY FEATURES OF THE PLC DECLINE STAGE
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’s little to talk about. The ideal thing is to stop further production of the product; and just try to sell out the existing one in the market.
Diagram showing the features of product life cycle in marketing
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