A product life cycle is the progression of an item through the four stages of its time on the market. The four life cycle stages are:
Every product has a life cycle, and the time spent at each stage differs from product to product.
The product life cycle stages
At the Introduction stage, the product comes to the market, and the business looks to get a foothold by:
- Establishing branding and assuring the market of the quality of the new product.
- An initial low pricing policy to get into the market, though with little competition, price may be high initially to recoup development costs.
- Selection of a distribution model to get the product onto the market.
- Promotion of the product by aiming it at specific target groups.
After a successful Introduction comes the Growth stage. This will accelerate developments at the first stage by:
- Maintaining the quality of the product and adding any extra services or support that become obvious during Introduction.
- Keeping the price at a good level to maintain sales growth.
- Increasing distribution and sourcing new, faster ways of getting the product onto the shelves.
- Marketing campaigns aimed at a broader audience and at growing market share for the product.
With growth established, Maturity is the next stage of the life cycle. The business deals with this by:
- Adding features that will differentiate the product from competitors.
- Cutting price to counter competition.
- Revising distribution channels and, in retail, using incentives to encourage stores to stock the original product in preference to newcomers.
- New promotions that aim to show differences between products.
When the Decline begins, the business will consider:
- Keeping the product on the market but adding or removing features or finding new uses for it.
- Reducing costs and production and keeping it for a niche segment.
- Discontinuing the product or selling the production rights to another company.
By keeping a strong hold on the four stages of a product life cycle, a business can maximize returns and know when the time is right to divest itself of the product. Not doing so may cost the business money and lead to a limited life cycle for the product.
Product Life Cycle FAQ
What is meant by product life cycle?
What are the 5 stages of the product life cycle?
- Introduction: The introduction stage is where the product is launched into the market.
- Growth: During the growth stage, the product becomes more popular and starts to gain more attention.
- Maturity: At this stage, the product is established and is reaching its peak in terms of sales and profits.
- Decline: The decline stage is where the product starts to lose popularity and sales start to decline.
- Exit: The exit stage is where the product is discontinued and no longer produced.
What are the 7 steps of product life cycle?
- Product Development: The first step of the product life cycle is the development of a new product. This stage includes researching and designing the product, as well as testing and refining it.
- Introduction: The introduction stage is when the product is launched into the market. This includes advertising, promotions and other marketing activities to make the product known to potential customers.
- Growth: During the growth stage, the product becomes more widely known and accepted by customers. This is the stage where sales and profits start to increase.
- Maturity: During the maturity stage, the product is well established in the market and sales are at their peak. This is the stage where the company will focus on improving the product and keeping customers satisfied.
- Saturation: At the saturation stage, the market becomes saturated with the product and sales start to decline. Companies will start to look for ways to differentiate the product from competitors.
- Decline: During the decline stage, sales and profits start to decline. Companies may start to reduce their spending on the product and look for ways to cut costs.
- Discontinuation: The final stage is when the product is discontinued from the market. This could be due to a variety of reasons, such as obsolescence or the product no longer being profitable.