Product lifecycle

Introduction to Product Lifecycle

  • The product lifecycle is a concept that describes the stages a product goes through from when it is first introduced into the market until its withdrawal.
  • The stages typically include introduction, growth, maturity, and decline.
  • Each stage in the lifecycle has distinct characteristics, challenges, and opportunities associated with it.

Introduction Stage

  • The introduction stage is when the product is launched into the market after development and testing.
  • This is usually the highest risk stage as the product is new and untested in the market. Hence, sales volumes are typically low.
  • High costs are associated with promoting and advertising the product to make potential customers aware of its existence.

Growth Stage

  • The growth stage is characterised by a strong growth in sales and profits.
  • The product begins to be recognized by potential customers, and positive word-of-mouth helps to increase sales.
  • This stage may attract competitors who may introduce similar products, leading to increased competition.

Maturity Stage

  • The maturity stage is when the product reaches peak market penetration and the growth rate slows down.
  • During this stage, competition may be high, which can result in lower price margins.
  • A company might seek to differentiate the product during this stage to renew customer interest and manage competition.

Decline Stage

  • The decline stage is characterized by a drop in sales. This could be due to market saturation, or new and better products being introduced by competitors.
  • A company might decide to discontinue the product, sell it to another company, or rebrand and refresh it.
  • It’s important to manage this decline, so as to not negatively impact the company’s overall profitability.

Understanding the Product Lifecycle

  • Understanding the product lifecycle allows for better management and marketing of a product.
  • It helps predict sales and profits, respond to changes in the market, and decide when to introduce new products or phase out old ones.
  • To manage the product lifecycle effectively, it’s also critical to understand target market behaviour, competitor actions, and wider market trends.