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Do you remember video tapes? Or your jumbled DVD library? In a world dominated by streaming platforms and on-demand entertainment, those clunky, plastic cassettes and fiddly discs already feel like artefacts from days gone by. This is the perfect example of the product life cycle in action.
If you’re a business owner with a product to sell, the product life cycle is a fundamental concept to grasp. Here we’ll take a closer look at how product life cycles work, their key stages, and how you can future proof your business to move with the market.
What is a product life cycle?
Put simply, the product life cycle is a way to describe the rise and fall of a product on the market. From development to decline, there are five key stages each item will go through – this is its life cycle. Understanding this model is fundamental in helping business owners make stronger decisions when it comes to marketing, budgets and growth strategies.
What are the stages of a product life cycle?
While the amount of time spent on the market will differ from product to product, there are five distinct stages in every product’s life cycle, each with their own risks and opportunities.
Before your product becomes a product you’ll go on a journey of market research – creating prototypes and testing your proposition so you know it has legs. Typically, this stage can take up a lot of time and money with no immediate reward – but setting down solid foundations will only serve you (and your product) well in the long run. Once you have your product ready to go, make sure you’re covered with product liability insurance.
The exciting part – you get to introduce your product to the market. Because no one knows it exists yet, this is when you’ll focus most of your resources on marketing and promotion. You’ll also need to get your pricing right, ensuring that your product appeals to your target market while giving you a healthy return – find out how by reading our guide.
Now your product is established, demand is growing and profits are on the rise. This may also be when competitors aim to replicate your success, so at this life cycle stage your marketing focus should be on strengthening your brand presence and adding value to your product.
This is typically the longest stage in the product life cycle. It’s when your growth begins to level out and the market has become saturated with competitors. Your focus here will be on keeping things fresh for your customers – making improvements to your product, highlighting USP’s and potentially reducing your prices.
This is when customer interest is waning, competitors have taken over the market share or your product has become outdated. While this is the final stage in the life cycle, there are still clever ways to manoeuvre out of a decline – by diversifying, repackaging or repositioning your product. Read more about growth strategies.
Product Life Cycle Examples
We’ve come a long way since floppy discs, but even they had their heyday.
- After their introduction in 1971, floppy discs had their growth stage in the 80s as the only way of storing and transferring data
- Over time floppy discs had improved storage capacity, entering the mature phase in the 90s
- As technology advanced and competitors began to offer more efficient alternatives like USB and CDs, the floppy disc faced market saturation and eventual decline
- Floppy disc production ended in 2009
Case in point that a product can stay in the mature stage for a very long time.
- Coca-cola was introduced as a soda fountain drink in 1886
- During its growth stage, demand for the fizzy drink skyrocketed so it was made available in bottles too
- To keep it accessible to the masses, the price remained five cents for 50 years
- Coca-cola has held steady in its maturity ever since – during that time the brand continuously improved their product, diversified their ranges, entered new markets and broadened their distribution channels
Apple has perfected their product life cycle by constantly updating and releasing exciting new models.
- Whenever a new iphone enters the introduction stage, the prices are kept high to maintain exclusivity and desirability
- The newest iPhone on the market will shift earlier models to a different stage in their life cycle, i.e. the oldest models will enter the decline stage as newer versions with improved technology are introduced
- If we take the iPhone itself as a single product, it’s very much thriving in the mature stage – this is because Apple continuously evolves and adapts to the needs of their customers, staying relevant and fending off competition
What to do if a product is nearing decline?
In most cases, decline is inevitable at some point, but rest assured there are strategic ways to extend the product life cycle and postpone this phase. Here are some tips extend the product life cycle if your product is nearing or experiencing a decline:
- Emphasise nostalgia and quality in your marketing strategy
- Diversify your advertising to explore new markets and demographics
- Reduce your price point
- Add new features
- Release new, improved versions to continuously restart the life cycle
- Refresh your brand and packaging
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.
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