In marketing, the life cycle of a product is understood as a series of stages through which a product passes from its introduction to the market until its withdrawal. The concept of a product life cycle arises from the analogy between the evolution of living things and products. Because both of them go through different stages throughout their existence. Living things track the curves of life that go through birth, youth, adulthood, old age, and death. As for products, the same cycle is produced, which you can appreciate below.
4 Stages of Product life cycle
Identifying factors that influence the evolution and demand of products. As well as the duration of each phase will determine the company’s capacity to adapt its products to the new needs of consumers. The life cycle of a product consists of 4 main stages: introduction, growth, maturity, and decline.
1. Introduction
In the introductory stage, after developing a marketing plan, the product was launched for the first time to the market. We faced the first stage full of uncertainty and risk. This is also the stage of the life cycle of a product that requires higher costs. Because it produces the first approach of the product to consumers where he contemplates previous market studies and product development itself. As well as investing in communications campaigns and promotional marketing actions.
Usually, at this stage, demand is lower than bidding. Because the highest percentage of sales comes from the most innovative consumers and early adopters, who are those who receive greater risk before buying and are eager to experiment with new products. The key in the life cycle stage of a product is to define and work on positioning and investigate the market response to the product, if necessary react agile and change the direction of the strategy. This life cycle stage also works on digital product development.
2. Growth
In the growth phase, the product is positioned in the specified segment and begins to be accepted by consumers. Usually, increased profits occur because production costs are reduced by economies of scale or by the acquisition of manufacturing experience. However, competition in the second phase of the product life cycle is usually not too intense. Possible new competitors have emerged, but these new players will try to differentiate their products and start building their brand positioning. The key to this stage is to strengthen the positioning and make changes to adapt products to increasing demand.
3. Death
The maturity stage occurs when the product has reached its peak in terms of market share. This stage, the third of the life cycle of a product, usually lasts longer than the others. Sales continue to increase, but at a slower and declining pace, until they are stable and begin to stop. At this stage the competition is quite large, so it does not only compete on prices but also has to identify and work with other factors that are relevant to consumers, to really get products and proposals with different values. The key at this stage is anticipating the fall of sales by looking for proposals and innovations that make the product attractive again to maintain sales.
4. Decide
No company wants to reach the decline phase, because this is the last stage of the product life cycle. Sales began to decrease gradually because the products have been replaced by other options that are more attractive to consumers. Profit can be a loss and, therefore, that the product stops being profitable for the company if the necessary action is not taken. In this phase, we usually recommend that the product be removed from the market because there are several opportunities to achieve resuscitation. The key at this stage is to minimize investment and plan actions where different aspects are considered: replacing the product or modifying it to refocus on the market.