Product Life Cycle

Product life cycle is a concept that describes the stages a product goes through from its introduction to the market until its decline and eventual removal from the market. The product life cycle concept is an essential tool for marketers to understand how a product evolves over time and how they can adjust their marketing strategies to meet the changing needs of their customers. The product life cycle consists of four stages: introduction, growth, maturity, and decline. Let’s explore each stage in more detail.

Introduction Stage:

The introduction stage is the first stage of the product life cycle, where the product is launched into the market. During this stage, the product is new, and there is little or no competition. The main focus of marketers during this stage is to create awareness of the product and build demand. Marketers use advertising and other promotional activities to inform potential customers about the product’s benefits and persuade them to try it. Pricing during this stage is often high to recoup the costs of developing and launching the product.

Strategies:

• Build awareness: The primary objective of marketers during this stage is to create awareness of the product among potential customers. Marketers can use advertising, public relations, and other promotional activities to inform customers about the product’s benefits and persuade them to try it.
• Offer product samples: Marketers can offer free samples or trials to encourage customers to try the product and experience its benefits.
• Use selective distribution: Marketers can limit the product’s distribution to specific channels or geographic areas to control costs and maintain quality.

Growth Stage:

The growth stage is the second stage of the product life cycle, where the product experiences rapid growth in sales and revenue. During this stage, the product gains acceptance among customers, and competition increases. Marketers focus on expanding distribution channels, improving the product’s quality, and reducing its price to attract more customers. The product’s brand image and reputation become essential during this stage, as it helps to differentiate it from competitors.

Strategies:

• Expand distribution: Marketers can expand the product’s distribution to reach a wider audience, including new geographic areas and distribution channels.
• Increase promotion: Marketers can increase promotional activities to maintain momentum and attract new customers.
• Improve product quality: Marketers can make product improvements or introduce new features to differentiate the product from competitors.

Maturity Stage:

The maturity stage is the third stage of the product life cycle, where the product reaches its peak in terms of sales and revenue. During this stage, the product faces intense competition, and customer demand begins to level off. Marketers focus on maintaining market share, increasing profitability, and extending the product’s life cycle through product improvements or modifications. Pricing during this stage is often reduced to maintain sales volume.

Strategies:

• Modify the product: Marketers can modify the product to meet changing customer needs and preferences. This can include adding new features or improving the product’s quality.
• Reduce price: Marketers can reduce the product’s price to maintain sales volume and market share.
• Focus on customer service: Marketers can focus on improving customer service and support to maintain customer loyalty.

Decline Stage:

The decline stage is the final stage of the product life cycle, where the product experiences a decline in sales and revenue. During this stage, the product faces strong competition from newer and better products, and customer demand continues to decline. Marketers focus on reducing costs and maximizing profitability by reducing marketing expenses and streamlining production processes. Eventually, the product may be phased out or replaced by a new product.

Strategies:

• Reduce costs: Marketers can reduce costs to maximize profitability during the product’s decline stage. This can include reducing marketing expenses and streamlining production processes.
• Focus on profitable segments: Marketers can focus on profitable customer segments to maximize revenue and profitability.
• Discontinue the product: Eventually, the product may need to be discontinued or replaced with a new product.

Examples of Product Life Cycle:

Apple iPhone:

The Apple iPhone is an example of a product with an extended product life cycle. Since its introduction in 2007, the iPhone has gone through several product life cycle stages, including the introduction, growth, maturity, and decline stages. However, Apple has extended the iPhone’s life cycle through product improvements and modifications, such as introducing new features and releasing new models, which have helped to maintain its market share and profitability.

VHS Tapes:

VHS tapes are an example of a product that has reached the decline stage of the product life cycle. VHS tapes were introduced in the 1970s and gained popularity in the 1980s and 1990s. However, with the advent of DVD and digital technology, the demand for VHS tapes declined rapidly. Today, VHS tapes are no longer produced, and they have been replaced by newer and better technology.

3 Common Alternate Patterns of PLC: Growth-Slump-Maturity Pattern, Cycle-Recycle Pattern, Scalloped Product Life Cycle

Growth-Slump-Maturity Pattern:

In this pattern, a product experiences a period of rapid growth, followed by a slump and then a period of maturity. During the growth phase, sales and profits increase as the product gains acceptance in the market. However, as the product becomes more established, sales growth slows down, and the product enters a period of decline or slump. Finally, the product reaches maturity, and sales stabilize, but growth slows down or stops.

This pattern is common for products with short life cycles, such as fashion items and electronic gadgets. An example of a product that follows this pattern is a smartphone model, which typically experiences rapid growth when it is first introduced, followed by a slump as newer models are released, and then a period of maturity where sales stabilize.

Cycle-Recycle Pattern:

In this pattern, a product goes through a cycle of growth, decline, and then re-introduction in the market. After the product reaches maturity and sales start to decline, the company may make significant changes to the product or introduce new marketing strategies to revitalize it and re-introduce it in the market. The product then goes through a new growth cycle before eventually declining again.

This pattern is common for products that have the potential for innovation or re-invention, such as fashion items or household appliances. An example of a product that follows this pattern is the Polaroid camera, which was initially popular but declined as digital cameras became more popular. However, the company re-invented the camera and re-introduced it in the market as a new product that combined the traditional Polaroid instant printing with digital technology.

Scalloped Product Life Cycle:

In this pattern, a product experiences a series of growth spurts followed by short periods of stability. The product experiences rapid growth during a period of innovation or market penetration, but as the product becomes more established, growth slows down, and the product enters a period of stability. However, new innovations or market changes can lead to new growth spurts, and the product experiences a series of ups and downs in its life cycle.

This pattern is common for products with long life cycles and high technological change, such as computers and software. An example of a product that follows this pattern is Microsoft Office, which has experienced multiple growth spurts over the years as new versions and innovations were introduced, but has also experienced periods of stability in between.

6 Important Factors Affecting PLC: Rate of Technical Changes, Rate of Market Acceptance, Ease of Competitive Entry and a Few Others

Rate of Technical Changes:

Technological advancements and innovation can significantly impact a product’s life cycle. If a company fails to innovate and improve its product, it may quickly lose market share to competitors with more advanced and up-to-date products. Thus, the rate of technical changes is a crucial factor affecting a product’s life cycle.

For example, smartphones have a short life cycle due to the rapid pace of technological advancements in the industry. The introduction of new features and capabilities, such as 5G, foldable screens, and enhanced camera technology, has accelerated the rate of technical changes in the smartphone industry, making it challenging for companies to keep up.

Rate of Market Acceptance:

A product’s success in the market is also influenced by the rate of market acceptance. The faster a product gains market acceptance, the more likely it is to experience a shorter life cycle. Conversely, if a product takes time to gain acceptance, its life cycle may be longer.

For example, electric cars faced slow market acceptance due to concerns over their range, charging infrastructure, and cost. However, as the technology improved, and consumers became more environmentally conscious, electric cars gained wider acceptance and experienced a shorter life cycle.

Ease of Competitive Entry:

The ease of entry into the market by competitors can also impact a product’s life cycle. If a product is easy to replicate, it may experience a shorter life cycle as new competitors enter the market and offer similar products.

For example, the smartphone industry has experienced a high level of competitive entry, with numerous companies offering similar products at varying price points. As a result, the life cycle of a smartphone model may be shorter due to the ease of competitive entry.

Changes in Consumer Tastes and Preferences:

Consumer preferences and tastes are constantly evolving, and a product’s life cycle can be influenced by these changes. If a product fails to meet changing consumer demands, it may experience a shorter life cycle.

For example, the popularity of low-carb diets and gluten-free products has influenced the life cycle of certain food products. Products that do not meet changing dietary preferences may experience a shorter life cycle.

Changes in Environmental Factors:

Environmental factors, such as laws and regulations, can also impact a product’s life cycle. For example, the introduction of new regulations on emissions or packaging can make a product obsolete or require significant changes to its design or production process, which can shorten its life cycle.

Competition from Substitute Products:

Substitute products can also affect a product’s life cycle. If a new product is introduced that offers similar benefits or features, it can quickly replace an existing product and shorten its life cycle.

For example, the rise of streaming services has impacted the life cycle of physical media such as DVDs and CDs. As more consumers shift towards streaming, the demand for physical media has decreased, leading to a shorter life cycle for these products.

Product Life Cycle – Marketing Techniques Used to Improve Sales: Advertising, Price Reduction, Adding Value, Explore New Markets and New Packaging

Advertising:

Advertising is a crucial tool in the introduction and growth stages of the PLC. At the introduction stage, advertising can be used to create awareness and generate interest in the new product. In the growth stage, advertising can be used to build brand loyalty and reinforce the product’s benefits.

For example, when Apple introduced the iPod, they used advertising to create awareness and generate interest in the new product. They focused on the unique features of the iPod, such as its small size and large storage capacity, to differentiate it from existing MP3 players in the market.

Price Reduction:

Price reduction is an effective marketing technique to stimulate demand and increase sales in the maturity and decline stages of the PLC. By reducing the price, a company can make the product more affordable and accessible to a wider range of consumers.

For example, as the demand for CDs declined due to the rise of digital music streaming, companies like HMV and Tower Records reduced the price of CDs to clear out inventory and increase sales.

Adding Value:

Adding value to a product is an effective marketing technique to differentiate it from competitors and increase sales in the maturity stage of the PLC. By adding new features or improving existing ones, a company can enhance the product’s value proposition and maintain customer interest.

For example, when Starbucks introduced their mobile app, they added value to their coffee products by allowing customers to order and pay using their mobile device. This convenience factor differentiated Starbucks from competitors and helped maintain customer loyalty.

Explore New Markets:

Exploring new markets is a marketing technique used in the growth and maturity stages of the PLC. By expanding into new geographic or demographic markets, a company can increase sales and extend the product’s life cycle.

For example, when Coca-Cola expanded into China, they used marketing techniques such as localizing their advertising campaigns and introducing new product flavors to appeal to the Chinese market.

New Packaging:

New packaging is a marketing technique used in the maturity and decline stages of the PLC. By updating the packaging, a company can create renewed interest in the product and attract new customers.

For example, when Cadbury’s Dairy Milk chocolate faced declining sales in the UK, they redesigned the packaging to highlight the product’s heritage and quality ingredients. This update helped differentiate the product from competitors and increase sales.