What Is The Concept Of Product Life Cycle – Companies must be able to both develop new products and manage them in the face of changing tastes, technology and competition. Generally, products go through a life cycle with predictable sales and profits. Marketers use the product life cycle to track this development and identify strategies to increase it. The product life cycle (PLC) begins with product development and introduction, then moves to abandonment or finalization. This development is shown in the table below.

The product life cycle can be a useful tool for planning the product life, but it has limitations.

What Is The Concept Of Product Life Cycle

What Is The Concept Of Product Life Cycle

Not all products follow a smooth and predictable growth path. Some products are tied to specific business cycles or have seasonal factors that affect growth. For example, enrollment in higher education closely follows economic trends. When there is a recession, many people lose their jobs and enroll in college to improve their job prospects. As the economy improves and more people work full time, college enrollment declines. This does not mean that education is going down, but that it is in a downward cycle.

Product Life Cycle Chart (marketing Concept) Stock Photo By ©geargodz 26504479

Additionally, evidence suggests that PLC systems apply across industries and not necessarily to individual brands or projects, which may vary further.[1]

Of course, changes in other elements of the marketing mix can affect the product’s lifetime performance. Changes in the competitive landscape during each of these stages can have a greater impact on business practices than the PLC itself. A successful promotional program or deep price reduction can improve the sales picture during the discount season, at least temporarily. Improvements driven by non-product strategies are often short-lived, and fundamental changes to product offerings provide longer-term benefits.

Whether one accepts the S-shaped curve as a valid business pattern or as a pattern that holds only for some products (but not for others), the concept of PLC may still be useful. It offers a system for dealing with problems and actions related to the sale of products. Sellers need to know the summary that applies to a product as it moves through the various stages. shelf. This concept is used by managers and marketing professionals as a factor in deciding when to increase advertising, reduce prices, expand into new markets, or change package. The process of strategizing how to support and maintain a product is called life cycle management.

Products, like people, have a life cycle. The life cycle of a product is divided into four stages — introduction, growth, maturity and decline.

Product Life Cycle Explained

A product starts with an idea, and in the modern business environment, it may not go much further until it goes through research and development (R&D) and is shown to be feasible and potentially profitable. At that time, the product is produced, sold and rotated. Some models of the product life cycle include the development of the product as a stage, even at this point, the product has not yet been delivered to the customer.

As mentioned above, there are four generally accepted stages in a product’s life cycle. Here are details on each.

The introduction phase is the first time customers are introduced to a new product. A company generally has to invest heavily in advertising and marketing campaigns focused on informing customers of the product and its benefits, especially if it is not clear what the product will do. .

What Is The Concept Of Product Life Cycle

During the introduction phase, there is usually no competition for a product, as competitors may be the first to explore the new offering. However, the company still experiences negative financial results at this stage because sales are low, promotional costs may be low to promote customer engagement, and marketing strategies is still under evaluation.

Product Life Cycle Powerpoint Template And Keynote Diagram

If the product is successful, it moves to the growth phase. This includes increasing demand, increasing production and expanding availability. The amount of time spent in the input phase before a company’s product is released will vary by industry and product.

During the growth period, the product becomes famous and known. A company may still choose to invest heavily in advertising if its product faces heavy competition. However, marketing campaigns may focus on differentiating the product from others rather than introducing the product to the market. A company can improve its products by improving operations based on customer feedback.

Financially, the growth phase of a product’s life cycle results in higher sales and revenue. As competitors begin to offer competing products, competition increases, potentially forcing companies to lower prices and experience lower margins.

The maturity stage of the product life cycle is the most profitable stage, the time when production and marketing costs are reduced. With the market full of products, the competition is now higher than in other stages, and the profits begin to decrease, some analysts refer to the maturity stage as when sales “rise”.

Product Life Cycle Stages Explained With Examples

Depending on the good, a company may begin to decide how to update the product or introduce new methods to capture a larger market presence. This includes getting more feedback from customers, and researching their demographics and needs.

During the maturity stage, competition is at its highest. Competing companies have had enough time to introduce competitive and improved products, and competition for consumers is at its peak. The level of sales is reasonable, and a company tries to have the product in this stage of maturity for a long time.

As competition increases as other companies imitate their success, the product may lose market share and begin its decline. Product sales begin to decline due to saturation of the market and other products, and the company may choose not to make additional marketing efforts because customers may have already decided if they are loyal to the company’s products. those or not.

What Is The Concept Of Product Life Cycle

If a product is fully retired, the company will cease production support for it and cease marketing efforts altogether. If not, the company may decide to renew the product or introduce a model of the next generation, completely redesigned. If the innovation is sufficient, the company can choose to re-enter the product life cycle by introducing the new version in the market.

What Is A Product Life Cycle? (definition And Examples)

The stage of a product’s life cycle affects how it is marketed to consumers. A new product needs to be explained, but a mature product must be differentiated from its competitors.

The product life cycle allows marketers and business developers to better understand how each product or brand fits together in a company’s portfolio. This allows companies to shift internal resources to specific products based on where those products are in the product life cycle.

For example, a company may decide to redistribute employee time to market for a product entering the introduction or growth phase. If not, you may need to invest more in engineering or customer service technician staff as the product matures.

A natural product life cycle has a positive impact on economic growth, as it promotes innovation and discourages support for outdated products. As the product progresses through the life cycle stages, companies using the product life cycle can realize the need to make the product more efficient, safer, more efficient, faster, cheaper , or better suited to the needs of the customer.

Adjusting Your Pricing Strategy To The Product Life Cycle Stage

Despite its use in planning and analysis, the product life cycle is not relevant to all industries and does not work consistently for all products. Think of popular beverage lines whose original products have been in maturity for decades, while twists or variations of the same company’s beverages have failed.

Product life cycles can also be artificial in industries with regulatory or trademark restrictions. Consider the new 20-year patent term under which patent applications are filed in the United States. Although a drug may be entering its growth phase, it can have a negative impact on competition when the patent expires at any stage.

Another consequence of the product life cycle is the possibility of planned obsolescence. As a product enters the maturity stage, a company may be tempted to start planning its replacement. This can happen even if the existing product still holds many benefits for consumers and has a long shelf life. For manufacturers who tend to introduce new products every few years, this can lead to product waste and inefficient use of product development resources.

What Is The Concept Of Product Life Cycle

Notification messages such as Microsoft’s warning that Windows 8.1 will be released in January 2023 are an example of a slowdown. Due to the aging of the operating system, Microsoft chooses to stop supporting the product and focus on newer technologies.

Product Life Cycle Hi Res Stock Photography And Images

A similar analytical tool to determine the market position of a product is the Boston Consulting Group (BCG) Matrix. This four-square table describes products based on market growth and market share:

Although there is no direct relationship between the matrix and