Using The Product Life Cycle
Understanding & Managing The Product Life Cycle
What is The Product Life Cycle?
Before introducing a new product or service to the market, it’s important to understand the concept of ‘The Product Life Cycle’. As human beings have a definitive life span that starts with birth and concludes with death, the products we consume experience a similar journey. Various stages make up the cycle, commencing with the inception of the product through to its final removal from the market.
Managing the Product Life Cycle
Good management of the product life cycle is vital to the success of any business. It’s a tool used to determine the strategies that need to be implemented at any stage in a product’s development. Alongside maximising profitability, prolonging the life cycle of a product should always be a priority. Netflix is a well-known example of a product that continues to enjoy a particularly long cycle. On the other hand, a product is considered a failure when it is - for any reason - unable to achieve either profitability or the anticipated life cycle as defined by the organisation. Remember Pokémon Go? A product with a poorly managed life cycle, introduced as a global craze that went on to experience rapid decline.
The Stages of the Cycle:
- Idea Generation
Although it isn’t technically a stage in the cycle, brainstorming ideas for a new product or service marks the beginning of the product life cycle. At this point, it’s important to understand the expectations of the target audience and how the product will act as a competitive alternative.
- Introduction to Market
The product is introduced to the market through a focused marketing effort, which is designed to establish a clear identity and promote maximum awareness. This stage will often require significant investment. However, all product research and development expenditure must be weighed up against the likely return on investment.
Consumer interest should activate the growth stage. This is the point at which the product’s position in the market is established. It is distinguished by increasing sales and the emergence of competitors.
Sustained marketing and promotional activity will continue to drive consumer demand upwards and the achievement of economies of scale will see a reduction of manufacturing costs. Businesses should, therefore, experience the greatest increase in profit margins during this stage.
- Product Maturity
Arrival of the product’s ‘maturity stage’ is evident when competitors begin to leave the market, sales velocity is reduced and the volume of sales begins to level off. It’s difficult for manufacturers to achieve a lengthy phase of maturity in a product; this is due to a number of different challenges that tend to present themselves at this stage.
A continuous fall in sales indicates that the product is entering into the decline stage. A saturated market, unfavourable economic conditions and the emergence of new fashion trends are just a few possible reasons why a product might enter this stage.
What Can We Do?
At Charlesworth, we can help you with the development of a product or service. We can assist your business in the coordination of a marketing plan that will give your product the best chance of enjoying an extensive life cycle.