Key Point
- a Product Life Cycle It consists of four stages: introduction, growth, maturity, and decline.
- Business owners need to carefully manage their products at each stage of their lifecycle.
- Understanding the product life cycle is essential for successful product management and marketing.
Want to learn more about product management and marketing? Read on to learn how to strategically manage your products through each stage of their lifecycle.
You can go into a Ford dealership and buy an F-150, but you can’t buy a Model T. Why is that the case, from a business perspective? Because the Model T has already gone through four stages of its product life cycle, eventually being replaced by emerging technologies in auto manufacturing. The F-150, on the other hand, is still moving through the stages of its life cycle. The market is mature, and the F-Series is America’s best selling truck—But the decline hasn’t started yet.
Every product in the retail market goes through four stages of its product lifecycle: introduction, growth, maturity, and decline. Here is an overview of these stages and some product lifecycle examples to help you learn from them.
What is the product lifecycle?
The product life cycle is the period during which a product is launched, experiences market growth, reaches peak product sales, experiences market decline, and is finally withdrawn from the market. Business owners carefully manage their products at every stage of the product life cycle: nurturing new products during the market introduction stage, driving quality and profit improvements during the growth and maturity stages, and strategically winding down products during the decline stage. Some large companies even have a dedicated member of the product team. Product Lifecycle Management.
The four stages of a product life cycle
The product life cycle model covers four distinct stages: General product life cycle theory says that each of these stages has defining characteristics that apply regardless of the product. The four stages are:
1.First of all
In this early stage of the product life cycle, you introduce your new product or service to the public and focus on your target market. During this stage, you educate the public about your new product in hopes of capturing market share. Your profit margins are likely to be low (if not negative) because the costs of manufacturing and marketing campaigns are greater than the revenue from sales.
Some entrepreneurs refer to the introduction stage as the development stage, but this terminology can be misleading. The development stage occurs at the end of the associated process. Product Development Lifecyclethe cycle in which a product evolves from idea to prototype to commercial product.
2. Growth
During the growth stage, demand and competition increase. This stage often involves increased marketing investments, increased production, expanding profit margins, and developing new distribution channels.
3. Maturity
Maturity is when sales volume for a particular product reaches its peak. Ideally, this is the most profitable stage in a product’s life cycle, when sales revenue exceeds marketing, manufacturing, and labor costs. In a well-run company, the maturity stage can last for years, if not decades. It’s useful if you sell a product that people will always need, like tires or tissues. It’s also useful if your product concept is far-reaching, like a video game franchise that keeps releasing sequels. Companies sustain the maturity stage by conducting ongoing market research, seeking customer feedback, and releasing new versions of existing products.
4. Decline
The final stage of a product life cycle is decline. Most products eventually disappear from the market due to obsolescence or changes in consumer behavior. Decline can also occur when a product is overtaken by a competitor with a better value proposition, product quality, or marketing strategy. Even if a product enters decline, it may not disappear completely for some time.
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What factors affect a product’s life cycle?
External factors can cause product lifecycles to work as expected for some brands while causing chaos for others. Some influencing factors include:
- Market saturation. Some companies struggle to move from the growth to maturity stage when the market is saturated with competitors. Brands with a lot of investor funding may be able to survive this saturation stage, while others may be forced to go under due to lack of market share.
- Technological advances. A product may grow strong, reach a stage of maturity, and then become obsolete and decline due to emerging technologies.
- Failed marketing. Sometimes great product design alone isn’t enough to make a product profitable. Sometimes the public may start to prefer a competitor’s brand simply because the competitor has a better marketing strategy.
Three examples of successful product lifecycles
To understand why the product lifecycle is important for a growing business, let’s take a look at some real-world product examples. Here are some success stories to get you inspired:
1. Bush Balm
Bush Balm has had great success with its “skin care anywhere” product line. Company co-founder David Gaylord points out that during the growth phase of a product’s life cycle, marketing, shipping, and manufacturing are expected to interact with each other. Establishing support services for each of these components can help during the growth phase of a product.
“If you’re a marketer but also responsible for shipping and manufacturing your product, the more you sell, the more work you have to do to manufacture and ship,” Gaylord explains. “So the more successful you are at marketing, the more time you have to dedicate to shipping and manufacturing.”
2. Queer Literature
Queer literature is a UK-based bookstore that specializes in LGBTQ-related books. Founder Matthew Cornford launched the business as an online-only retailer. To reach the ideal stage of maturity, Cornford realized he needed to adjust his business model – specifically, to open a brick-and-mortar store in his hometown of Manchester. The lesson? Sometimes you have to change direction to go from growth to maturity.
Cornford explained that opening physical stores “creates an opportunity for face-to-face conversations with customers that you don’t want to have online. People want to come into the store and just talk and open up. … Online, that interaction doesn’t happen.”
3. Kai Collective
Silkworm Active Founder and fashion blogger Fisayo Longuet amassed 50,000 blog followers before launching her first fashion line. Despite her fans, her first line’s products didn’t sell as well as she hoped. “So I thought, how do I give people what they want?” Longuet said in an interview. The myth of overnight success“I want to go back to my roots and incorporate elements of my Nigerian heritage into Kai.”
The second launch was a huge success. “In 2020, we launched our Mesh Marble Gaia Print dress,” says Longe. “The dress became really popular. It sold out and now there are loads of copycats on the market.” Learning from the relatively short life cycle of her first line, Longe re-evaluated her strategy and positioned her products and business for growth.
Product Lifecycle FAQs
How does a company know when a product has entered the growth stage of its product life cycle?
The growth stage of a product life cycle traditionally involves entering new markets, scaling up production, expanding marketing activities, hiring more staff, etc. During the growth stage, total revenues are higher than in the introduction stage, but net profits may not increase because the company must invest heavily in marketing and production.
What are some signs that a product is entering the maturity stage of its product life cycle?
Above all, the mature stage of the product life cycle is characterized by sustained profits: a product in the mature stage of its life cycle makes more money from sales than it spends on operations and marketing.
Is the product life cycle the same for all products and industries?
Product life cycles vary by product and industry. New technologies, such as solar power or electric vehicles, may spend decades in the introduction phase before entering the growth phase. Products with sustained customer demand, such as certain staple foods, may spend most of their existence in the mature phase. When assessing your product life cycle, it is useful to directly compare yourself to others in your industry.
Can a company successfully relaunch a product that has already reached the decline stage of its product life cycle?
Yes, products in decline can sometimes make a comeback when customer behavior changes, like when 21st century musicians became interested in somewhat forgotten synthesizers from the 1970s and 1980s.
