Product Life Cycles

Product Life Cycles

Introduction of the Product Life Cycle

  • A product life cycle is the course that a product undergoes from its introduction to the eventual withdrawal from the market.
  • Products pass through several stages, each posing different challenges, opportunities and problems to marketers.
  • Being aware of the life cycle helps businesses plan marketing strategies more effectively.

The Stages of a Product Life Cycle

Introduction Stage

  • The introduction stage is when the product is introduced to the market.
  • At this stage, the demand is uncertain and costs can be high due to the setting up of the product.
  • The business may use promotional activities to raise awareness for the product and stimulate demand.

Growth Stage

  • The growth stage is characterised by rapidly increasing sales.
  • Intensive promotional activity continues, aimed at building brand loyalty.
  • The company may need to increase its production to meet the growing demand.
  • Competitors may enter the market with similar products at this stage.

Maturity Stage

  • The maturity stage is when the sales growth begins to slow down, reaching a saturation point.
  • Competition can be intense as many competitors are vying for market share.
  • Buildings brands, improving product quality, and efficient customer service become important for standing out.
  • Businesses often adopt pricing strategies to maintain market share.

Decline Stage

  • The decline stage begins when the product starts losing its market share.
  • The rate of sales declines as customers find new or better alternatives.
  • At this stage, companies often decide whether to drop, maintain or renew the product through added features or exploration of new markets.

Factors Affecting the Length of the Product Life Cycle

  • Several factors can impact the length of each stage. Innovations, new technologies, shifts in consumer tastes and increased competition can all shorten the stages.
  • High entry barriers, patents protected innovations or lack of substitutes may lead to longer life cycle stages.

Use of the Product Life Cycle

  • The product life cycle concept helps businesses in planning and executing marketing strategies based on the stage of the product.
  • For instance, a product in the growth stage might require further investment to cope with increased demand, whereas in the decline stage, cost-cutting measures might be necessary.
  • Knowing which stage their product is at can help businesses make more informed decisions.