Why do some products soar to popularity while others never seem to take off? A clear understanding of the various product life cycle stages can benefit businesses that are about to introduce an innovation or embark on a business venture.
A product generally undergoes four main stages as it emerges from the drawing board, to the production stage, and on to end-consumers. These are the introductory stage, the growth stage, the maturity stage, and the stage of decline.
The introductory stage is when the product is first brought to the market. Some products take a while to gain consumer acceptance, while others are an instant hit. If the learning curve for a product is low, consumer acceptance may be quick. Nonetheless, creating a buzz or marketing strategy is still crucial.
When a finished good (or service) is introduced to the market, companies, more often than not, need to spend money to create public awareness for it. Nowadays, though, product introduction, especially on the part of small entrepreneurs, need not be as costly as before, especially with the advent of social media. The introductory stage is the most time-consuming among the four major product life cycle stages.
Even before a product is introduced, the marketer should have conducted extensive research and market segmentation. This entails an assessment of the product’s strengths and weaknesses, and how it can be differentiated from competition.
The growth stage is the time when the product has captured consumer attention. Oftentimes, companies maintain ad/publicity spending, or use the least costly marketing channels, like the internet. Improving supply chain strategies can also accelerate sales.
The maturity stage is when the product reaches market saturation. Certain industries are so dynamic and competitive. A luxury resort may win market share now, but there may be formidable competitors that can corner the same market segment that the resort may be targeting.
Oftentimes, a company that has had a measure of success in the homefront may decide to expand to the international market to gain greater market share.
Finally, there is the stage of product decline. This is the least desired among the product life cycle stages. Companies may tweak the product or phase it out of the market and introduce a better one, or they may adjust their pricing.
There are various factors that may lead to product decline. Take the case of the Macintosh computer. Back in the 80s, the Macintosh took the computing world and the publishing business by storm. Macintosh offered many interesting capabilities during the introductory stage. When it reached the growth and maturity stages, the first Mac models brought in high revenues for the firm. Unfortunately, technology may become obsolete. The change in leadership at the firm also affected company operations and product sales.
Other examples of innovations that had undergone all four product life cycle stages are the digital camera and cars (like the Volkswagen and Mini Cooper). The initial models brought in sales, but modern technology and changing consumer tastes led to newer and better innovations in the market, easing out the `old’ products.