- A product life cycle consists of four stages: Introduction, Growth, Maturity, and Decline.
- Business owners must carefully tend to their products during each stage of their life cycle.
- Understanding the product life cycle is essential for successful product management and marketing.
Interested in learning more about product management and marketing? Keep reading to discover how to strategically manage your products through each stage of their life cycle.
You can walk into a Ford dealership and buy an F-150, but you can’t buy a Model T. Thinking in business terms, why is that the case? It’s because the Model T has already gone through the four stages of a product’s life cycle and eventually gave way to emerging technologies in car manufacturing. Meanwhile, the F-150 is still making its way through its life cycle stages. It has reached market maturity—the F-series is the bestselling truck in America—but it hasn’t begun to decline.
Every product in the retail market goes through four product life cycle stages: the introduction stage, the growth stage, the maturity stage, and the decline stage. Here’s an overview of those stages and some product life cycle examples to learn from.
What is a product life cycle?
A product life cycle is a period of time during which a product is introduced, experiences market growth, reaches maximum product sales, enters market decline, and ultimately leaves the marketplace. Business owners carefully tend to their products at every stage of the product life cycle. They nurture new offerings during the market introduction phase, push for improved quality and profits during the growth and maturity phases, and strategically wind down the product during the decline phase. Some large companies may have product team members specifically dedicated to product life cycle management.
4 stages of the product life cycle
The product life cycle model covers four distinct stages. Prevailing product life cycle theory says that each of these stages has defining characteristics that apply no matter the product. The four stages are:
This initial stage in a product life cycle involves introducing a new item or service to the public and honing in on a target market. During this stage, you educate the public about your new offering in the hope of winning market share. Profit margins may be low—if not negative—because you’re probably spending more on manufacturing and marketing campaigns than you’re taking in from sales revenue.
Some entrepreneurs call the introduction phase the development stage, but that term can be misleading. The development stage occurs at the end of a related process called the product development life cycle, or the cycle where a product goes from an idea to a prototype to a commercially available product.
In the growth stage, both demand and competition pick up. This stage often involves ramped-up marketing investments, increased production, growing profit margins, and new distribution channels.
The maturity phase represents the peak sales volume for a particular product. Ideally, this is the most profitable stage in the product life cycle, with sales revenue exceeding expenses from marketing, manufacturing, and personnel. In the best-run companies, maturity phases can last for years, if not decades. It helps when you sell a product that people will always need more of, like tires or tissues. It also helps to have an expansive product concept, like a video game franchise that keeps rolling out sequels. Companies remain in their maturity phase by conducting continual market research, soliciting customer feedback, and rolling out new iterations of an existing product.
The final product life cycle stage involves decline. Most products will eventually fade from the market, often due to obsolescence and shifting consumer behavior. Decline stages also occur when you’re overtaken by a competitor with a better value proposition, product quality, or marketing strategy. It’s possible for a product to enter the decline stage but not disappear entirely for some time.
What factors can affect the product life cycle?
External factors can make the product life cycle work as expected for some brands while throwing other brands for a loop. Some factors that play a role include:
- Market saturation. Some companies struggle to transition from a growth phase to a maturity phase when the market is too saturated with competitors. Brands with a lot of investor financing can sometimes wait out this saturation stage, but others will have to fold for lack of market share.
- Technological advances. A product can grow robustly and reach its maturity stage, only to decline because emerging technologies have rendered it obsolete.
- Unsuccessful marketing. Great product design may not be enough to push an item to profitability. Sometimes the public develops a brand preference for a competitor simply because that competitor has a better marketing strategy.
3 successful product life cycle examples
To understand what makes the product life cycle important to a growing business, examine some real-world product stories. Here are a few success stories to learn from:
Bushbalm has found great success with its range of “skincare for everywhere” products. Company co-founder David Gaylord points out that when you’re in the growth stage of the product life cycle, you can expect marketing, shipping, and manufacturing to feed off of one another. Establishing support services for each of these components can help with a product’s growth stage.
“If you're the marketing person, but also the person who's either shipping or making the product, the more you sell, the more work you have to do on manufacturing or shipping,” Gaylord explained. “So, you realize if you're successful in marketing, your time goes completely to shipping and manufacturing.”
2. Queer Lit
Queer Lit is a UK-based bookseller that specializes in LGBTQ titles. Founder Matthew Cornford established the business as an online-only retailer. Cornford realized that to achieve his ideal maturity stage, he’d need to adjust his business model. Specifically, he’d need to open a brick-and-mortar store in his hometown of Manchester. The takeaway? Sometimes you have to pivot to graduate from the growth phase to the maturity phase.
As Cornford explained, opening a physical store created the opportunity for “an in-face conversation with customers that they don’t want to have online. People want to come in and just talk to you and they want to open up. … When you’re doing that online, that interaction just doesn’t happen in that way.”
3. Kai Collective
Kai Collective founder and fashion blogger Fisayo Longe amassed 50,000 blog followers before launching her first fashion line. Despite having an audience, the first line of products did not sell as she’d hoped. “So I thought, OK, how can I give people what they want?” Longe said in an interview about debunking the myth of overnight success. “Let me really go back to my roots and bring elements of my Nigerian heritage into Kai.”
The second launch proved to be wildly successful. “In 2020, we released our mesh marble Gaia print dress,” Longe said. “It’s become really popular—it sells out and it’s highly imitated now.” After learning from her first line’s relatively brief life cycle, Longe reimagined her strategy, setting her products—and business—up for growth.
Product life cycle FAQ
How do businesses know when a product has entered the growth stage of the product life cycle?
The growth stage of the product life cycle traditionally involves branching out to new markets, scaling up production, expanding marketing efforts, and hiring more staff. The growth stage should provide more gross revenue than the introduction phase, but it may not provide more net profit because the business will have to invest heavily in marketing and production.
What are some signs that a product is entering the maturity stage of the product life cycle?
More than anything, the maturity stage of the product life cycle is characterized by sustained profit. Products in the maturity phase of their life cycle bring in more money from sales than the money spent on operations and marketing.
Is the product life cycle the same for all products and industries?
The product life cycle varies among different products and industries. New technologies, such as solar power and electric cars, might require decades in the introduction phase before entering a period of growth. Items with sustainable customer demand, like certain food staples, can spend most of their existence in the maturity stage. When evaluating your own product’s life cycle, it helps to directly compare yourself to others in your industry.
Can businesses successfully relaunch a product that has already reached the decline stage of the product life cycle?
Yes, products in the decline stage can experience a renaissance. This happens when customer behavior changes, such as when 21st-century musicians took interest in somewhat forgotten synthesizers from the 1970s and 1980s.