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product life cycle stages: Strategies, Definition, Diagram and Characteristics

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product life cycle
(Last Updated On: October 25, 2019)

”The product life cycle is an attempt to recognize distinct stages in sales history of the product.” Philip Kotler

 

Product life cycle refers to the typical stages a product goes through during it’s life time. The product life cycle is broken down into four different stages which means the process is in four different/independent stages which include 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.

Product life cycle strategies can however be defined as those ways methods or means adopted by companies, marketers or business owners to ensure to ensure their product is successful in OR at every stage of the product like cycle.

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Definition of PLC (product life cycle)

Product life cycle stages can also refer to the period of time over which an item is developed, brought to market and eventually removed from the market.

Product life cycle stages explanation

product life cycle

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

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 hand held 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, 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

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.

Because…

  • 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 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. It is often as a result of change in innovations or shifts in consumer preference.

This is the stage in the product life cycle stages in which 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.

CHARACTERISTICS 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’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.

That’s it on the last stage of the product life cycle stages.

product life cycle stages diagram
product life cycle stages diagram with some important features.

Strategies for product life cycle

  1. Introduction stage product life cycle strategies

To ensure you introduce the product into the market successfully, the following strategies may be adopted:

  • Aggressive advertising

It’s no more news the essence of creating of a product in most cases is to solve a particular problem. Now after creating the product, to ensure it achieve it’s  aim, there’s need to make  sure your target audience are aware of a solution to their problem (which is your product). And you can only achieve this by ringing the bell of your product in the ears of your prospects (creating awareness); Which is not possible without aggressively advertising your product.

Aggressive advertising can be possible by leveraging media advertising, sales promotion, publicity, personal selling etc. 

  • Discounts to dealers (middlemen, agencies etc)
  • Test marketing (this strategy is often adopted before the proper introduction of the product)
  • Discounts to customers
  • Coupons
  • Skimming pricing, penetration pricing, psychological pricing strategy etc.

2. Growth stage product life cycle strategies

Below are some of the product life cycle strategies adopted by firms,  business owner and marketers at the growth stage.

  • Improved customer service (this is a must to ensure the customers keep coming to repeat purchases)
  • Competitive pricing strategy (when your prices are almost equal or equal to that of your competitors, your customers will find it  needless to abandon your product because of it price).
  • Introduction of other product version:  For example, this product life cycle strategy is where a company into yoghourt production introduces other versions such as vanilla yoghourt, chocolate yoghourt etc.   (The need for this is so enable the firm satisfy various type of customers and also encourage selection)
  • Improve brand image: (They can achieve this of course by being socially responsible – which includes sponsoring event or activities for occupants of the society they are operating their business activities) other promotional activities can also be used to build brand image.
  • Improved distribution channels ( This strategy comes in handy to ensure your product is available at the right place, right time, right quantity and in the right form as demanded by your target audience).
  • Advertising: The advertisement done here served two key purpose(s): first is to create awareness and secondly to serve as reminder to your audience who are aware of the product but are yet to try it.

3. Maturity stages product life cycle strategies 

  • Increase product quality
  • Improved customers service
  • Creative promotional or ad campaign
  • Cut prices if necessary: This will help attract new buyers

4. Decline stage product life cycle strategies

  • See below for strategies for managing the product life cycle.

FAQS

Strategies For Managing The Product Life Cycle

  1. Increase Frequency of use
  2. Increase the number of users
  3. Find new users
  4. Change package, sizes, labels, or product quality.

How does product life cycle stage impact marketing strategy

In my opinion, understanding the current stage of a product will help you determine how to increase sales and achieve a sustainable competitive advantage over your competitors.

In an instance whereby your product is in introductory stage with high competition – maybe due to other existing similar products; Aside aggressive advertising, your best bet here will be making sure your product is of higher quality and of course cheaper in other to break Into the market easier.

Everybody loves cheap and quality products but of course they need to know it exists (this is where aggressive advertising is needed). The strategy adopted by making your price cheaper is called penetration pricing strategy. And it is usually adopted to help you gain footing in the market.

Strategies For Managing The Product Life Cycle

  1. Increase Frequency of use
  2. Increase the number of users
  3. Find new users
  4. Change package, sizes, labels, or product quality.

Product life cycle stages definition

Product life cycle 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 stage is the most essential

The Maturity stage…

Which product life cycle stage is the most important

All product life cycle stages are 100% important. A product that isn’t introduced correct or the right way is more like to experience little or no growth as expected by the company than otherwise.

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 potential 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 in this stage will lead to a possible decline.

But in all sincerity, all of the stages are important. If your product is introduced well,  it’s likely to grow and also mature in the market. If you think about this carefully, they all connect.

Product life cycle stages examples

References:

Contemporary marketing

Product Life Cycle Management in Apparel Industry

 

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