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The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products: - Introduction - Growth - Maturity - Decline
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ProductLifeCycleStages.com
ProductLifeCycleStages.com
ProductLifeCycleStages.com
This initial stage require significant investment
ProductLifeCycleStages.com
Challenges of the Introduction Stage◦ Small or no market: start with low sales◦ High costs: invest in R&D, marketing and promotion◦ Losses, Not Profits: negative profits
Benefits of the Introduction Stage◦ Limited competition: the lack of direct competition
is an advantage◦ High Price: new product price can be above market
price
ProductLifeCycleStages.com
Product Life Cycle Management◦ All about building the demand and establishing the
market◦ Emphasis on promotion, production and developing
distribution channel
Photo: flickr/AlainDurand
ProductLifeCycleStages.com
The key stage for:◦ Establishing a product’s position◦ Increasing sales and ◦ Improving profit margins
Requires:◦ Development of consumer demand ◦ Reduction of manufacturing costs
ProductLifeCycleStages.com
Challenges of the Growth Stage◦ Increasing Competition: from new manufacturers◦ Lower Prices: to achieve the desired increase in sales◦ Different Marketing Approach: to make the most of the
growth potential
Benefits of the Growth Stage◦ Costs are Reduced: through economies of scale◦ Greater Consumer Awareness: leads to the sales increase◦ Increase in Profits: both in overall amount and profit
margin
ProductLifeCycleStages.com
Product Life Cycle Management◦ Typically profits are highest during the Growth
stage◦ Necessary to reinvest in marketing and promotional
activity
Photo: flickr/Promoview Marketing Promocional
ProductLifeCycleStages.com
The primary focus is to maintain market share
ProductLifeCycleStages.com
Challenges of the Maturity Stage◦ Sales Volumes Peak: the market becomes saturated◦ Decreasing Market Share: challenge to maintain market
share◦ Profits Start to Decrease: less market share, less profit
Benefits of the Maturity Stage◦ Continued Reduction in Costs: economies of scale &
production efficiency◦ Increased Market Share Through Differentiation:
innovative marketing campaigns or diverse product features
ProductLifeCycleStages.com
Product Life Cycle Management◦ Innovation will maintain or even
increase market share
Photo: flickr/Vermin Inc
ProductLifeCycleStages.com
Demonstrated by the fall in both sales and profits
Opportunities to continue making profit
ProductLifeCycleStages.com
Challenges of the Decline Stage◦ Market in Decline: difficult to prevent◦ Falling Sales and Profits: to slow this fall by trying
and increasing market share ◦ Product Withdrawal: before losing money
Benefits of the Decline Stage◦ Cheaper Production: if able to reduce costs◦ Cheaper Markets: to look to new, cheaper markets
ProductLifeCycleStages.com
Product Life Cycle Management◦ In the Decline stage, a product can still be viable◦ Successful manufacturers focus on effective product
life cycle management
Photo: flickr/Michael P. Whelan
www.ProductLifeCycleStages.com
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