This article explains the concept of “Product Life Cycle” which is also referred as ‘PLC’ and the various stages involved in it. I will also mention the reasons and marketing strategies that can be used at each stage of this cycle.
Meaning:
Product Life Cycle is the period consisting of various phases that a product goes through starting with the introduction of a product into the market to the stage where it becomes out or obsolete.
However, it is interesting to note that not every product follows this same rigid path. There have been instances where after a product got into the market, it couldn’t survive long enough to go through the other stages and vanished.
On the contrary, there are also examples of products/brands that have stayed for a much longer duration in the market. Example: Coco-cola.
Importance:
The idea of PLC emphasizes the fact that to make a product stay in the market for the long-term race, certain factors should be looked upon like product uniqueness, market demand, and marketing strategies.
This concept is used by the marketing and management department to make decisions regarding the 4P’s of marketing i.e Product, Price, Place, and Promotion. Also, feel free to check out this amazing article on Marketing by Aditi Rathi.
Stages of Product Life-Cycle:
1. Introduction Stage:
This is the stage when a product is introduced into the market. Before the product has been made, extensive market research is done to understand the needs and requirements of the audience to create a solution in the form of a product that can create value for their customers. The sales and profit in this stage are generally low.
During this phase, a business usually spends heavily on ads campaigns to highlight its features, benefits. unique characteristics. They also arrange distribution channels and contact wholesalers and retailers for the supply of the commodity in case the demand spikes.
This phase is extremely important for a business, to check the product-market fit of its MVP i.e. Minimum Viable Product.
Example: Smart Phones
Marketing Strategies:
- Building curiosity among audiences via engaging ads.
- Arrangement of distribution channels in case of high demand.
- Building trust with your customers through quality content and product.
- Price and value of the product should match.
- Implementation of brand positioning strategies.
- Running targeted ads.
2. Growth Stage:
After a product has passed through a successful introduction in the market by being accepted by the early adopters, it enters the growth stage whereas per a fundamental psychological principle that directs human behavior i.e. social proof, other people start purchasing the product as well. (Check out this article to learn about growing your small business.)
The profit starts increasing whereas the cost per unit declines as the sales go up. During this stage, a lot of competitor brands emerge to grasp their position in the market by giving a unique advantage. (Visit this creative website Gyanaras.com).
Example: Electric Cars
Marketing Strategies:
- After-sale services can help to keep the existing customer happy and satisfied.
- The distribution network must be expanded to serve a wider area.
- Innovate ads campaigns must be introduced to build connection and interest.
- Content marketing and re-targeting strategies must be used to bring more customers down the funnel.
3. Maturity Stage:
The maturity stage arrives when a product has reached its saturation point where the sales have become stabilized. This is the most profitable stage for a business and they should try to lengthen this phase as much as possible.
It becomes easy to enter new markets because the companies already have good experience and knowledge of the market and its audience. certainly with some adjustments and adoptions. However, that being said, this stage also faces maximum competition which pushes the companies to bring modifications in their product and price.
Example: McDonalds
Marketing Strategies:
- Reaching and engaging the existing customer to sustain their loyalty.
- Entering new markets with modifications.
- Regular feedback and surveys from the customer to bring required changes to match their expectations.
- Discounts, Limited offers must be run to attract more people.
4. Decline Stage:
In this stage, the sale and profit of the product start declining as customers have already started switching brands, their interest has declined since they might have found a better substitute or their preferences have changed.
The number of brands in competition is maximum which in turn increases the marketing cost hence affecting the profits. The pace at which the sales of the products decline varies depending upon the substitute products that have been introduced and strategies that have been opted.
However, companies need to plan and implement effective marketing strategies to respond to change. Furthermore, the cost and time involved in bringing back the profits would increase the loss and the product has to be finally withdrawn from the market.
Example: CD/DVD players
Marketing Strategies:
- Serving markets that can give maximum sales and profits and discontinuing from the weaker ones.
- The decision of harvesting or divesting.
- Planning of repositioning strategies.
- Responding to the change in market behavior on time.
Watch this video to get a brief understanding about PLC: ⬇️
Summary:
- To implement efficient marketing strategies for a product in the market, it is important to know the various stages of the product life cycle.
- The product life cycle management involves strategies to make decisions regarding 4p’s of marketing.
- There are four main stages of PLC: Introduction, Growth, Maturity, and Decline.
- The Introduction stage has higher amount of expenses in the forms of advertisement.
- The growth stage refers when sales and profits are increasing.
- The maturity stage consists of stable profits and high sales.
- The decline stage refer to the rapid drop in profit and sales of the product.
- Continuous analysis and development of the product will happen a business to sustain in the market.
Evaluate every step that you take for your business, measure, and when required modify it. Staying flexible in the market keep give the benefit for growing in the long-term.
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Your writing skills are amazing I mean just reading the article I have the complete knowledge of products life cycle…keep writing you are great
Thank You!
This is so well written. The way you have explained the concepts a non marketing background person won’t even find it difficult to understand. This is beautifully and so simply explained and written. I always look forward to your writings. Waiting for more of your blogs.
Thank You!