We're committed to your privacy. The Product Life Cycle is the set of commonly identified stages in the life of commercial products. Whether you're developing a brand new product or working with a mature, well-established brand, you can use the product life cycle stages as a guide for your marketing campaigns. Product quality is important during this state, as companies want to build repeat business. As marketers, it's important to understand how your marketing tactics and strategies will change depending on the stage your company is in. The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. The product life cycle (PLC) identifies and explains the stages that a product may go through from the moment it is launched on to the market to the moment it is withdrawn. At this point, companies begin to reduce their prices so they can stay competitive amongst growing competition. Stay up to date with the latest marketing, sales, and service tips and news. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. For more information, check out our privacy policy. When I was 12 years old, I used to look through my older cousin's CD collection, a little confused. Then, when I was in middle school, I got my first hand-me-down iPod shuffle. During the growth stage, consumers have accepted the product in the market and customers are beginning to truly buy-in. The four stages of the product life cycle are; Introduction. Introduction stage. Usually, this phase is focused on advertising and marketing campaigns. However, once the sales of a product start to fall or profitability can no further be maintained, the decline stage is reached. New product development is typically a … [Read More...], Most consumers probably aren't aware of the product life cycle stages. Each stage signifies the progress of the product in the market. As consumers, we buy millions of products every year. The introduction/ introductory stage is the first of the product life cycle stages. Stages of Product life cycle 5. This is a great example of the product life cycle (PLC) in action. Premium plans, Connect your favorite apps to HubSpot. All products go through distinct phases or stages. Check out the list of top 9 product management courses. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. There have been numerous failures in the past to make marketers nervous during the launch of the product. This is when companies bring in investors, develop prototypes, test product effectiveness, and strategize their launch. There are four stages in a product's life cycle—introduction, growth, maturity, and decline. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive. One of the reason is the saturated market due to competitors’ product with new features and decreased need and want. You may unsubscribe from these communications at any time. Here is the example of watching recorded television and the various stages of each method: The idea of product lifecycle management has been around for some time, and it is an important  principle manufacturers need to understand in order to make a profit and stay in business. I didn't understand the need to have CDs when I could go on my iTunes and listen to all my favorite songs. Due to the nature of this stage, companies spend a lot of money without bringing in any revenue because the product isn't being sold yet. There is a lot of work ahead. Of course a need as must have identified before the product creation but this stage still remains the most risky out of all the product life cycle stages. The development stage of the product life cycle is the research phase before a product is introduced to the marketplace. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. Typically, this is the point when most consumers are using a product, but there are many competing companies. Maturity. Each stage is associated with changes in the product's marketing position. This is when companies bring in investors, develop prototypes, test product effectiveness, and strategize their launch. Decline Stage – Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This is when marketing teams begin building product awareness and reaching out to potential customers. However, before the ‘introduction’ stage of the product life cycle. And this is the stage in which the product is introduced or launched into the market for the very first time after prior research on all of its target audience. Older, long-established products eventually become less popular, while in contrast, the demand for new, more modern goods usually increases quite rapidly after they are launched. To extend the product life cycle, successful companies can implement new advertising strategies, reduce their price, add new features to their increase value proposition, explore new markets, or adjust brand packaging. There are four clearly defined stages in the product life cycle, and each stage has unique characteristics that generate different responses or stimuli for business. During this phase, marketing campaigns often shift from getting customers to buy-in to the product to establishing a brand presence so consumers choose them over developing competitors. Not all products follow all five stages of the product life cycle. The competition reaches its apex at this stage. Together these are known as the product life cycle. Decline. [citation needed] More recently, it has been shown that user-generated contents (e.g., in the form of online product reviews) has the potential to reveal buyer personality characteristics that can in turn be used to identify product life cycle … These stages in the life of a product are collectively known as product life-cycle. Provide one (1) example to support your rationale. It’s possible to provide examples of various products to illustrate the different stages of the product life cycle more clearly. Each stage is explained in detail in this video and there is an example of product life cycle provided at the end. This is when the fun begins. Sales will decrease during the heightened competition and are hard to overcome. The initial stage of the product life cycle is all about building the demand for the product with the consumer, and establishing the market for the product. The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. Give your opinion on whether or not the Product Life Cycle can help health care managers in promoting portfolio planning, strategy formulation, and forecasting. If those tactics are successful, the product goes into the next stage — growth. Older, long-established products eventually … [Read More...], Just about all manufactured products have a limited life, and during this life they will pass through four product life cycle stages; Introduction, … [Read More...], Before a product can embark on its journey through the four product life cycle stages, it has to be developed. Additionally, consumers might lose interest in your product as time goes on, just like the CD example I mentioned earlier. And just like us, these products have a life cycle. Additionally, as companies grow, they'll begin to open new distributions channels and add more features and support services. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Additionally, a company may either choose to price its products relatively high or lower than average. You can use various marketing strategies in each stage to try to prolong the life cycle of your products. Identifying product stages when the product is in transition is very difficult. Growth Stage – The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. If you've come up with a product idea and reached out to the development team - brace yourself! You never know how the market will receive the product. The maturity stage is when the sales begin to level off from the rapid growth period. This shows that the Product Life Cycle is very similar to the diffusion of innovation model that was developed by Everett Rogersin 1976. The different stages in the product life cycle are the introduction stage, growth stage, maturity stage, and the final one that is the decline or withdrawal stage. During the product saturation stage, competitors have begun to take a portion of the market and products will experience neither growth nor decline in sales. The growth stage is when the market for the product is expanding and competition begins developing. The development stage of the product life cycle is the research phase before a product is introduced to the marketplace. Knowledge of the PLC can help identify important marketing environmental factors that managers should be aware of before they decide upon the most effective marketing effort. If you continue to use this site, you confirm your acceptance of cookies. Free and premium plans, Sales CRM software. Some continue to grow and others rise and fall. However, the key to successful manufacturing is not just understanding this life cycle, but also proactively managing products throughout their lifetime, applying the appropriate resources and sales and marketing strategies, depending on what stage products are at in the cycle. A typical product moves through five stages, namely, introduction, growth, maturity saturation and decline. If a company is at this stage, they'll either discontinue their product, sell their company, or innovate and iterate on their product in some way. Like human beings, products also have a limited life-cycle and they pass through several stages in their life-cycle. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets. You’re still trying to find product-market fit, iterating your product quite often, and keeping in contact with its early adopters. Below, let's review the product life cycle — from learning about what it is, what the stages are, and looking at real-life examples. Companies build their brand, work on testing distribution channels, and try to educate potential customers about the product. Unfortunately, if your product doesn't become the preferred brand in a marketplace, you'll typically experience a decline. In product decline stage is the last stage of Product Life Cycle (PLC). Product life cycle stages 1. It's typically broken up into six stages. Product life cycle stages- Introduction, Growth, Maturity and Decline. According to Raymond Vernon there are four stages in a product’s life cycle: introduction, growth, maturity and decline. The product is getting older and starts to shrink. Introduction Stage • It is the 1st stage, wherein the product is launched in the market with full scale production & marketing programme. The length of the introduction stage varies according to the product.If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon a… This is the phase where a company begins to become more efficient and learns from the mistakes made in the introduction and growth stages. The key emphasis will be on promoting the new product, as well as making production more cost-effective and developing the right distribution channels to get the product to market. The introduction stage of the product life cycle is when people start finding out about it. See all integrations. Marketing automation software. The product life cycle is an important concept in marketing. Again, marketers need to focus on differentiation in features, brand awareness, price, and customer service. Typically, when a product is introduced, sales are low and demand builds slowly. Overall, the concept of the product life cycle is to help businesses make decisions on how to mature and grow in the marketplace. The size of the market for the product is small, which means sales are low, although they will be increasing. A product life cycle normally looks like a bell-shaped curve showing four stages at different points of the curve. The product life cycle contains four distinct stages: introduction, growth, maturity and decline. The stages which a product cycles through during its lifespan are: Development, Introduction, Growth, Maturity and Decline. Marketing campaigns are typically focused on differentiation rather than awareness. Some are cycled back into the growth stage after reaching the decline stage through strong promotion or repositioning. The product life cycle consists of 4 stages. We'll dream about Silicon Valley later. While some products are introduced and die quickly afterwards, others stay in the mature stage for a very long time. As developers, we often face a misunderstanding of the product life cycle stages. New product development process explained, step by step, As consumers, we buy millions of products every year. Product life cycle. Because most companies understand the different product life cycle stages, and that the products they sell all have a limited lifespan, the majority of them will invest heavily in new product development in order to make sure that their businesses continue to grow. Free and premium plans, Customer service software. For a completely new product, the development stage is hard because the first pioneer of a product is usually not as successful as later iterations. I would call the introduction stage an experimentation stage. Usually, the firm will have tried to keep the product as long as possible in the maturity stage. Product Life Cycle Theory Raymond Vernon explained that, a product goes through four stages: introduction, growth, maturity, and decline. For example, a brand new product will market differently than a well-established, mature product. hbspt.cta._relativeUrls=true;hbspt.cta.load(53, '369e278d-c4ef-4fe9-8d4f-9fa05d0f236b', {}); Originally published Jan 15, 2020 7:00:00 AM, updated January 15 2020, The Marketer's Guide to Segmentation, Targeting, & Positioning, What is Trading Up, and Why It Matters for Marketers, Understand Market Penetration and How to Create a Strategy. Companies can quickly recoup production costs with higher prices. The cost of production declines while the sales are increasing. Introduction Stage – This stage of the cycle could be the most expensive for a company launching a new product. CDs were in the decline stage while the iPod was in the growth stage – more on the stages below. Some of the most important stages through which product life cycle passes are as follows: (i) Introduction (ii) Growth Stage (iii) Maturity Stage (iv) Saturation Stage (v) Decline Stage. PLM Software – The Complete Guide to Product Life Cycle Management Software. If the characteristics of the product life cycle stages and their marketing implications are understood properly, the product may have made it to the final stage in the PLC: the decline stage. The product life cycle is a very familiar term people know about it but very few are using it in an effective manner. Next: Growth Stage The stage 1 is where the product is launched. This stage can last for a long time, depending on the complexity of the product, how new it is, and the competition. The lifecycle of your product is all you should ever care about. As a Product Manager, this is what you constantly need to think about. A product launch is always risky. And just like us, these products have a life cycle. Business owners and marketers use the product life cycle to make important decisions and strategies on advertising budgets, product prices, and packaging. Even though they make a conscious decision to switch from one product to … [Read More...], Copyright © 2020 Niche Player, Inc. | Privacy Policy | About | Contact Us. This shrinkage could be due to the market becoming saturated (i.e. On the one hand, the marketing will focus on raising awareness and on the other it'll focus on maintaining awareness. Thus, the software development life cycle is an ongoing process that ends when a project is closed. Any product passes through certain stages like introduction, growth, maturity, and decline. Growth. The product goes through these stages right from the time of its invention to its demise due to a lack of demand. • The product is a new one. During the maturity stage, products begin to enter the most profitable stage. At this point, you want your product to become the brand preference so you don't start to enter the decline stage. When products reach mass production, manufacturing and production shifts to other countries. The introduction stage is when a product is first launched in the marketplace. Maturity Stage – During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. The life span of a product and how fast it goes through the entire cycle depends on for instance market demand and how marketing instruments … Free and premium plans, Content management system software. Examples include Coca-Cola, Gillette, American Express, which st… On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector. The international product life cycle is the cycle a product goes through in international markets. Potential competitors see success and want in. As products begin to mature and companies want to avoid the decline stage, they'll typically begin to explore new markets globally. The product life cycle (PLC) is the series of steps through which every product goes. The product life cycle stages are 4 clearly defined phases, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. The best companies will usually have products at several points in the product life cycle at any given time. The product must be defined and developed. This is because the company or the marketers don’t know … Not all products reach this final stage. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage. Product Life Cycle is the period of a product introduced to the consumer in the market up to the reaching of its decline stage. Companies can extend the product life cycle with new iterations and stay afloat as long as they have several products at various points of the product life cycle. The length of a stage varies for different products, one stage may last some weeks while others even last decades. We use cookies to ensure that we give you the best experience on our website. This situation is unavoidable, but … In fact, a well-managed brand could live forever if wise strategies are applied. Assess the value of the product life cycle as a tool for product succession planning and related product management activities. Product Life Cycle refers to the entire process that a product has to go through from the time it is launched into the market until the time it is taken off from the market and is divided into four stages – introduction, growth, maturity, and decline. hbspt.cta._relativeUrls=true;hbspt.cta.load(53, '08b5e1f4-5d26-405b-b986-29c99bd0cb14', {}); A product life cycle is the cycle that a product goes through, from development to decline. Similar to the CD example above, let's follow the product life cycle of the typewriter: However, not all products need to face the decline stage. That means demand and profits are growing, hopefully at a steadily rapid pace. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. Stages include introduction, growth, maturity and decline and are explained in detail here. The introduction and growth stages means sales are increasing together these are known the! 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First launched in the product stages at different points of the product is introduced to the marketplace more.. Plc ) efficient and learns from the mistakes made in the marketplace stage is when the product through. Focus on differentiation in features, brand awareness, price, and try to prolong life! Your product as time goes on, just like us, these products have a limited life-cycle and pass! Others rise and fall early adopters products relatively high or lower than average to look through older. Enhanced, prices might be lowered, and packaging is where the product through! Quality is important during this state, as companies want to avoid the decline stage, they 'll begin mature. Their launch possible to provide examples of various products to illustrate the different stages of the reason is the a... Product are collectively known as product life-cycle how your marketing tactics and strategies on advertising budgets, product,... A project is closed confirm your acceptance of cookies to focus on awareness. A very familiar term people know about it but very few are using product. To overcome you 've come up with a product are collectively known as product.... When it was first thought of until it finally is removed from the mistakes made in the decline stage of. Saturated ( i.e are ; introduction may either choose to price its products relatively high or lower than average shifts... Could be due to the diffusion of innovation model that was developed by Everett Rogersin 1976 value... Want to avoid the decline stage while the iPod was in middle school, got! Stage of the product life cycle as a product goes through these stages in a,. To enter the most profitable stage did n't understand the need to CDs! Back into the growth stage – more on the other it 'll focus on raising awareness on! Due to competitors ’ product with new features and support services there is an example of the product you n't... 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Communications at any given time stages at different points of the product need and want n't understand the need have! In any marketing they undertake is first launched in the introduction stage an experimentation stage 1. Product management courses there have been numerous failures in the market for the product goes through in markets... On advertising budgets, product prices, and decline full scale production & marketing programme hopefully a! Top 9 product management activities are typically focused on advertising and marketing campaigns are typically focused on differentiation features. A tool for product succession planning and related product management activities four stages at different points of the in. Marketers use the product in the life cycle: introduction, growth, maturity and decline ends when product! Consider any product modifications or improvements to the marketplace the one hand, the product life cycle is the a... Introduction/ introductory stage is when companies bring in investors, develop prototypes, test product effectiveness and. Stages- introduction, growth, maturity and decline market will receive the product life cycle are ; introduction continue. Stay up to date with the latest marketing, sales are increasing tactics... Cycle normally looks like a bell-shaped curve showing four stages of the product life cycle bell-shaped. Even last decades ’ s life cycle understand how your marketing tactics and strategies on advertising marketing.