When I was 12 years old, I was looking through my older cousin’s CD collection, a little confused.
I didn’t understand the importance of having CDs when I can listen to all of my favorite songs on iTunes. Then when I was in middle school I got my first iPod shuffle.
This is a great example of the Product Lifecycle (PLC) in action. CDs were in decline while the iPod was growing. Now, you seldom find a CD in someone else’s music collection unless they’re an enthusiast or want to feel nostalgic for their younger years.
Nobody wants their product to become “obsolete” and reach the end of its product life cycle. However, it is important to understand what stage your product is in so that you can make better marketing and business decisions. You can mature and grow in the market by being agile in responding to changing customer needs, adding new offerings to your offering, and employing new technology that will keep you updated on the market.
Below you will learn what the lifecycle looks like, take a look at the lifecycle stages, and go through some real-world examples.
What is the product lifecycle?
The product life cycle is the sequence of phases that a product goes through during its existence, from development through to decline. It is usually divided into six stages. Entrepreneurs and marketers use the product lifecycle to make key decisions and strategies about advertising budgets, product prices, and packaging.
As a marketer, it is important to understand how your tactics and strategies change depending on the stage of your product.
For example, a brand new product is marketed differently than an established, mature product. On the one hand, the marketing campaigns focus on raising awareness, on the other hand, on maintaining awareness.
Organizations also use the product lifecycle to:
- Establish competition authority. If your product is new and recently launched, you can market it as a new and improved alternative to an existing product. Once the product is established, you can vouch for its long history of use in your branding.
- Choose a Pricing strategy. Depending on the life cycle stage of your product, you can determine how the product should be rated. A new product can be cheaper to attract more buyers, while a product that is growing can be more expensive.
- A … create Marketing strategy. Your product life cycle phase determines which strategy to pursue. Audience maturity and knowledge play a huge role in the type of content you post on your website and social media profiles.
- Respond before the product begins to decline. There is no worse feeling than watching your product slowly become obsolete or be supplanted by a competing product. By keeping an eye on the life cycle stages, you can create a strategy that will stay one step ahead of you in reaching the saturation and decline levels.
The product lifecycle benefits companies as they can change their wording and position to best market the product at the stage it is in. If your product was recently launched and you try to market it as a long-established solution, consumers will see through right and will trust you less as a result.
In the following, I will cover the phases of the product life cycle in more detail.
What are the phases of the product life cycle?
The development phase of the product life cycle is the research phase before a product is brought to market. This is when companies engage investors, develop prototypes, test the effectiveness of products, and strategically plan their rollouts. Because of the nature of this stage, companies spend a lot of money without generating any income because the product is not yet being sold.
This phase can take a long time depending on the complexity of the product, novelty and competition. For a completely new product, the development phase is difficult because the first pioneer of a product is usually not as successful as later iterations.
Marketing strategy for the development phase
While marketing usually starts at the introductory stage, you can start getting your product going by securing endorsement from established voices in the industry. You can also post early (and cheap) consumer research or testimonials. Your marketing goal in this phase is to build on your brand awareness and establish yourself as an innovative company.
In the introductory phase, a product is launched on the market for the first time. At this point, marketing teams begin building product awareness and reaching out to potential customers. When a product is launched, sales are usually low and demand slowly increases.
Typically, this phase focuses on advertising and marketing campaigns. Companies are working on testing sales channels and trying to inform potential customers about the product.
Introduction of Stage Marketing Strategy
This is where the fun begins. After the product is launched, you can use inbound marketing and content marketing to promote the product. Education is very important at this stage. Your target consumer needs to know what they are buying before they buy it. If your marketing strategies are successful, the product moves to the next phase – growth.
During the growth phase, consumers have accepted the product in the market and customers have started to really shop. That means that demand and profit will hopefully grow steadily and rapidly.
In the growth phase, the market for the product grows and competition begins to develop. Potential competitors will see and want your success.
Marketing strategy for the growth phase
During this phase, marketing campaigns often shift from customer buy-in to building branding, making consumers prefer them to evolving competitors. As companies grow, they will also open new sales channels and add more features and support services. You will also be promoting these in your strategy.
The maturity stage is when sales level off after the rapid growth stage. From this point on, companies start lowering their prices in order to stay competitive in the growing competition.
This is the phase where a company becomes more efficient and learns from the mistakes made in the launch and growth phases. Marketing campaigns tend to focus on differentiation rather than awareness. This means that product features can be improved, prices can be reduced and sales can be intensified.
During the ripening phase, the products begin to enter the most profitable phase. Production costs decrease while sales increase.
Maturity Marketing Strategy
When your product has grown into a mature offering, you may feel like you are “passing by” because sales are stable and the product has been established. Here, however, it is important to establish yourself as a market leader and differentiate your brand.
Continuously improve the product as adoption increases, and in your marketing strategy, let consumers know that the product they love is better than it was before. This will protect you in the next stage – saturation.
During the product saturation phase, competitors have started to occupy part of the market and the products will not see growth or decline in sales.
Typically this is where most consumers start using a product, but there are many competing companies. At this point, you want your product to become the brand preference so you don’t go into the period of decline.
Marketing strategy for the saturation phase
When the market is saturated, you need to focus on differentiating in terms of features, brand awareness, price, and customer service. The competition is at its highest at this point. Hence, it is important not to leave any doubts about the superiority of your product.
When product-level innovation is not possible (as the product requires only minor changes at this point) invest in your customer service and use customer testimonials in your marketing.
When your product does not become the preferred brand in a market, there is usually a decline. Sales will decline during the intensified competition that is difficult to overcome.
Additionally, new trends emerge over time, just like the CD example mentioned earlier. When a company is at this stage, it will either discontinue its product, sell its company, or innovate and iterate its product in some way.
Reject stage marketing strategy
While companies want to avoid the period of decline, sometimes it doesn’t help – especially when the entire market has fallen, and not just your product. In your marketing strategy, you can focus on nostalgia or emphasize the superiority of your solution to bring this phase to a successful conclusion.
To extend the product life cycle, successful companies can also implement new advertising strategies, lower their prices, add new features to increase their value proposition, explore new markets or adapt branded packaging.
The best companies typically have products at multiple points in the product lifecycle at one point in time. Some companies are looking to other countries to start the cycle again.
International product life cycle
The international product life cycle (IPL) is the cycle that a product goes through in international markets. As products begin to mature and companies want to avoid the period of decline, they will typically explore new markets around the world. When products reach mass production, manufacturing and production move to other countries as well.
The international product life cycle phases are identical to those of a normal product life cycle. The development phase is different, however, as local customs and regulations can affect how long it takes to get the product to a new market.
Warning: once you’ve laid the foundations for a new market, your competitors are sure to follow suit and the life cycle stages will continue to saturation and eventually decrease. You have the option to either expand into another market or learn from previous mistakes and innovate before the decline begins.
Next, let’s look at some examples of product life cycles.
Examples of the product life cycle
- The typewriter
- Cable television
Let’s track the product life cycle of popular products that have now reached the acceptance phase.
1. The typewriter
The typewriter was the first mechanical writing tool – a worthy successor to pen and paper. Ultimately, however, other technologies gained traction and replaced them.
- development: Before the first commercial typewriter was launched, the overall idea had been developing for centuries, starting in 1575.
- introduction: The first commercial typewriters were introduced at the end of the 19th century.
- growth: The typewriter quickly became an indispensable tool for all types of writing and became widespread in offices, businesses, and homes.
- Maturity: Typewriters were in their maturity phase for almost 80 years as this was the preferred product for typing communication until the 1980s.
- saturation: During the saturation phase in the 1990s, typewriters were exposed to strong competition from computers.
- decline: Overall, the typewriter could not withstand competition from new technologies and the product was eventually discontinued.
As we turn to the 21st century, we see the rise and fall of Vine, a short-form video sharing app that was the source of many memes at its peak but eventually declined due to other platforms.
- development: Vine was founded in June 2012 and mostly competed with Instagram.
- introduction: The app was presented to the public in 2013. Their distinguishing feature was the short video format. Users only had seven seconds to film something that was funny, absurd, or a mixture of both.
- growth: Just two years after its release, Vine had over 200 million active users. Its popularity led to the appearance of the phrase “Do it for the Vine”.
- Maturity: Since Vine was only on the market for a few years, it never reached maturity. Although adoption was high, it was still a fairly new app.
- saturation: Vine competed in an already saturated market. Instagram, Snapchat, and YouTube were the standout names in its category, and Vine soon began reducing usage.
- decline: When Musical.ly and later TikTok were introduced, Vine lost a large portion of its user base and was shut down. It has been superseded by Byte, a similar short-form video sharing platform.
3. Cable television
Do you remember the days when you switched channels to find out what to watch? I do – and they clearly feel like something from the past. While cable television is still available, it’s safe to say that it is nearing decline.
- development: Cable television was developed in the first half of the 20th century. John Walson was credited with his invention.
- introduction: The first commercial television system was introduced in 1950, and by 1962 the technology was showing the first signs of growth.
- growth: After a decade freeze in cable television development (due to legal restrictions), the technology gained momentum and by 1980 more than 15 million households had cable.
- Maturity: Cable television matured around the 1990s. Around seven out of ten households had cables.
- saturation: By the beginning of the 21st century, this technology was oversaturated, and it was also beginning to compete with other modern developments such as on-demand services and high definition television (HDTV). While the Internet was still in its infancy, it would soon be gaining traction in cable television as well.
- decline: From 2015, cable television saw a significant decline. Online video streaming services like Netflix and Hulu have priority – and this trend is set to continue.
Not all products have to face decline. Companies can extend the product lifecycle with new iterations and stay afloat as long as they have multiple products at different points in the product lifecycle.
Keep an eye on the life cycle of your product
Whether you’re developing a brand new product or working with a mature, well-established brand, you can use the stages of the product lifecycle as a guide for your marketing campaigns. Each phase defines how you will educate your audience about the product, how you will position your brand in the market, and how you will decide to move forward after the phase of decline. When you consider the life cycle of your product, you can invest in better marketing campaigns that result in a higher ROI.
Editor’s Note: This post was originally published in January 2020 and has been updated for completeness.