The product life cycle plays a crucial role for all products offered by companies. Understanding how it works can help you in making better decisions when it comes to your products. From a Bitcoin bank to your typical brick and mortar business, everyone needs to know how it will impact what’s being provided. Here’s what you need to know.

Defining the Product Life Cycle

When referring to the product life cycle, this can be said: it’s the total length of time that a product is presented to consumers on the market until it’s no longer sold.

But what is the product life cycle made up of?

4 major stages define the product life cycle. They consist of the following:

Introduction
Growth
Maturity
Decline

Each section can impact and define how the product is managed, along with how marketers decide to market the product. For example, the stages can indicate how much money should be spent on advertising, whether prices need to be reduced, if it’s a good time to expand into new markets and if any product modifications are needed.

How It Works

Much like humans, products have a life cycle. All products start with an idea that has potential. This idea is then researched and goes through different stages of development. Following this, if the product gets the green light, it is then manufactured, marketed and introduced to the market.

As we noted there are 4 major stages that a product goes through. Here’s a little more detail of what to expect through every stage:

Introduction – Typically the introduction is where a large investment is used to promote the product. Mainly this is through the use of advertising and other marketing techniques to increase product visibility.

Growth – If the introduction has gone according to plan, the product will then progress to the growth stage. During this phase, businesses are likely to increase production to meet demand. Furthermore, products are likely to be available in additional locations.

Maturity – Throughout the maturity stage, the product should reach the maximum amount of profit it can make. This is in part due to the reduction in costs from producing and marketing the product.

Decline – When an increased amount of competition enters the market that takes a part of the market share, the product has entered the final stage: decline. Competitors during this time tend to offer similar products at a reduced cost or with additional features, making them more appealing.

Real-world Examples of The Product Life Cycle

By looking at some companies that have completed the product life cycle, we can see that it can happen to anyone, no matter how big or well-known. For example, do you remember Woolworths? The store chain had various locations throughout the United Kingdom, but in 2009 it went into administration causing the closure of 807 stores nationwide. Many factors contributed to its downfall, including a rapidly changing retail market and competition offering better prices. They missed opportunities, didn’t pivot towards better directions and made bad decisions.

Final Thoughts

Most products will experience the 4 stage product life cycle. Understanding which one a product is in can ultimately determine how the company makes decisions, whether it be further development or a new marketing strategy.