Definition of the product life cycle
The product life cycle is a very important topic in marketing. According to Lancaster & Reynolds (2004), the product life cycle refers to various stages a product goes through in its life from the time it is conceived to the time it is removed during the decline stage. It has four stages namely introduction (launch), growth, maturity and decline.
What are the main stages of the product life cycle?
The main stages of the product life cycle are as follows:
Once a new product is developed, it is introduced to the market. In this stage, companies focus on building product awareness and creating a market for the product. Sales may be very low in this stage and therefore, the overall cost may be high. Companies need to employ a number of marketing mix strategies such as selective distribution channels, advertising etc. to ensure that customers are aware of the product and are willing to go for it.
The growth stage is usually characterized by a strong growth in sales and profits. This is a stage where the cost of the product is going down due to economies of scale and other factors. The overall amount of profits will increase and companies may decide to reinvest the profits in the business to further promote the product or do something else.
In this stage, the product is well-known to the customers. It is the stage where the product has reached its climax. It is established in the market and perhaps has a good market share. The company must now do everything possible to maintain the market share. However, the problem is there will be a lot of competitors who will also fight for the same market share. Therefore, the marketers must devise effective marketing mix strategies to help the product fight off competition.
The demand for the product will eventually decrease. This is called the decline stage of the product life cycle. The downturn may be caused by change of customers’ taste, new products, and/or other factors. Decline is almost inevitable; however, companies can still make some profits by adopting less-costly production methods. The demand for products such as type writers and audio cassettes declined long time ago. Consequently, they are hardly seen in the developed world.
Criticisms of the product life cycle
Many people would argue that not all the products will go through the same life cycle as suggested by the model. Some products may in fact jump to maturity right after they are introduced to the market without going through the growth stage. Some music albums and electronic devices may be good examples in the regard. However, the model is very useful for marketers. They can devise their marketing strategies in line with the stages their product goes through.
We hope the article has helped you explore different stages of the product life cycle. You may also like reading Product life cycle marketing strategies. If you liked this article, please share it by clicking on the icons below.
The article publication date: January 2017
Lancaster, G. & Reynolds, P. (2004) Marketing, 1st Edition, Palgrave Macmillan
Photo credit: www.wikipedia.org
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.