As consumers, we buy millions of products every year.

And just like us, these products have a life

cycle. Older, long-established products eventually become less popular, while in contrast, the
demand for new, more modern goods usually increases quite rapidly after they are launched.
Because most companies understand the different product life cycle stages, and that the products
they sell all have a limited lifespan, the majority of them will invest heavily in new product
development in order to make sure that their businesses continue to grow.

Product Life Cycle Stages Explained

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 Stage – This stage of the cycle could be the most expensive for a company launching
a new product. The size of the market for the product is small, which means sales are low,
although they will be increasing. On the other hand, the cost of things like research and
development, consumer testing, and the marketing needed to launch the product can be very high,
especially if it’s a competitive sector.

Growth Stage – The growth stage is typically characterized by a strong growth in sales and
profits, and because the company can start to benefit from economies of scale in production, the
profit margins, as well as the overall amount of profit, will increase. This makes it possible for
businesses to invest more money in the promotional activity to maximize the potential of this
growth stage.

Maturity Stage – During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up. This is probably the most
competitive time for most products and businesses need to invest wisely in any marketing they
undertake. They also need to consider any product modifications or improvements to the
production process which might give them a competitive advantage.

Decline Stage – Eventually, the market for a product will start to shrink, and this is what’s known
as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the
customers who will buy the product have already purchased it), or because the consumers are
switching to a different type of product. While this decline may be inevitable, it may still be
possible for companies to make some profit by switching to less-expensive production methods
and cheaper markets.
Product Life Cycle Examples
It’s possible to provide examples of various products to illustrate the different stages of the
product life cycle more clearly. The traditional product life cycle curve is broken up into four key
stages. Products first go through the Introduction stage, before passing into the Growth stage. Next
comes Maturity until eventually the product will enter the Decline stage. These examples illustrate
these stages for particular markets in more detail.

3D Televisions: 3D may have been around for a few decades, but only after considerable
investment from broadcasters and technology companies are 3D TVs available for the home,
providing a good example of a product that is in the Introduction Stage.
Blue Ray Players: With advanced technology delivering the very best viewing experience, Blue
Ray equipment is currently enjoying the steady increase in sales that’s typical of the Growth
Stage.

DVD Players: Introduced a number of years ago, manufacturers that make DVDs, and the
equipment needed to play them, have established a strong market share. However, they still have
to deal with the challenges from other technologies that are characteristic of the Maturity Stage.
Video Recorders: While it is still possible to purchase VCRs this is a product that is definitely in
the Decline Stage, as it’s become easier and cheaper for consumers to switch to the other, more
modern formats.
Another example within the consumer electronics sector also shows the emergence and growth of
new technologies, and what could be the beginning of the end for those that have been around for
some time.

Holographic Projection: Only recently introduced into the market, holographic projection
technology allows consumers to turn any flat surface into a touch-screen interface. With a huge
investment in research and development, and high prices that will only appeal to early adopters,
this is another good example of the first stage of the cycle.
Tablet PCs: There are a growing number of tablet PCs for consumers to choose from, as this
product passes through the Growth stage of the cycle and more competitors start to come into a
market that really developed after the launch of Apple’s i-Pad.
Laptops: Laptop computers have been around for a number of years, but more advanced
components, as well as diverse features that appeal to different segments of the market, will help
to sustain this product as it passes through the Maturity stage.
Typewriters: Typewriters, and even electronic word processors, have very limited functionality.
With consumers demanding a lot more from the electronic equipment they buy, typewriters are a
product that is passing through the final stage of the product life cycle.
While it’s usually left up to the manufacturers and their marketers to worry about Product Life
Cycle Management and what implications the different stages might have for their business,
considering actual products is a good way to show consumers the part they play in this life cycle.

However, the key to successful manufacturing is not just understanding this life cycle, but also
proactively managing products throughout their lifetime, applying the appropriate resources and
sales and marketing strategies, depending on what stage products are at in the cycle.

Measures to revive the product in the decline stage

A product is in decline if sales and profits are declining. The reasons for a product's entering this
stage include changing customer preferences, evolving technologies, quality control issues,
aggressive competition and regulatory changes. Management may invest in additional marketing,
address quality issues and withdraw from unprofitable market segments to sustain profits.
However, if the decline is due to a fundamental shift in the marketplace, such as the introduction
of a new technology or new government regulations, then the only viable options might be to
gradually exit the market, look for strategic options or regenerate the product and start a new life
cycle. An example of a regeneration strategy could be the migration of newspapers from print to
the Internet.

From the birth or launch of the product, to the decline, every offering undergoes what the business
world calls the Product Life Cycle. The Product Life Cycle shows how the sales of any given
product change over time. There are five stages of the life cycle, which include the following:
Stage 1 – Launch
Stage 2 – Growth
Stage 3 – Maturity
Stage 4 – Saturation
Stage 5 – Decline

Not all products follow this life cycle precisely, and time periods will differ among product or
service offerings, depending upon many market factors. Each offering will experience different
time spans in each stage, or may never make it past research and development. But how you go
about certain business related activities could affect how your product travels through the Product
Life Cycle.

1. Keep Refining Your Offers to Maximize Profitability

Maximizing profits is the main goal of your business; but how you go about it is key. When a
product is already in its market, there are several factors to maintain and refine it for optimum
profitability, these include:
Pricing Adjustments
Advertising and Promotion
Increasing Penetration with Customer Base
Finding New Customer Segments
A great way to maximize profitability with an existing product is to introduce a “follow-up”
product – one that is considered an enhancement or add-on for your already thriving offer. The
idea here is to keep your product competitive and refined in the marketplace, adding additional
value for your customers.
Bundling complementary products and services is another great way to enhance the product for
your consumers. This includes offering a few things that will continue to pique the interest of your
current and potential consumer base. Try offering bonus items such as a 30 minute consulting call,
tickets to an upcoming live event or bonus content that will solidify you as an expert in your
niche.
Cultivate your offers to help provide your audience with solutions to their needs through active
and mindful marketing. This will help give your product an edge in the marketplace and set you
apart from competitors.
2. Update Products to Keep and Escalate Customer Relationships

You should never underestimate the value and power of a loyal customer base. By keeping
relationships fresh with updated products, you will continue to see repeat purchases and satisfied
consumers; this is something that money just cannot buy.
Customer relationships are what aid in promoting your business effectively. According to the
global management-consulting firm, Bain and Company, a 5% increase in retention yields profit
increases of 25 to 100 percent. On average, repeat customers spend nearly 67% more than that of
new customers. So this proves that building sound customer relationships is key for your business
to thrive in its given industry.
One way of going about keeping and escalating your customer relationships is by updating
products and services. Offering something valuable in exchange for their business is crucial for
maximizing positive relationships. Large improvements or additions don’t have to be necessary.
This might just include a new bonus, providing insights or advice on the usefulness of your
product or staying in touch with your consumer.

Another method of updating your products may include technology or R&D (research and
development) efforts to introduce an updated, yet very similar product or service. Take for
example the technology giant, Apple. The iPod was a major offering that consumers fell in love
with from its release in 2001. Thereafter, Apple has continuously updated and released “better and
more updated” versions of that same product. Now, the iPod touch, nano and shuffle have all
made their appearances and have answered the musical needs of Apple’s consumer base.
3. Constantly Innovate and Improve Your Products and Services

There are many reasons why you should be continuously innovating and improving upon your
products and services. By doing so, you are improving upon the success of your business. Those
businesses that fail to innovate face the risk of losing to their competitors, losing the customers
that they have built long-lasting relationships with and also risk reaching the ‘decline’ stage in the
Product Life Cycle. Innovation and new product launches can be an essential factor between
becoming a market leader or just another general product provider.
Below are some very simple steps to incorporate to continuously innovate and improve upon your
products and services:
Respond to trends and competition within your industry
Taking a product you already have and building upon it
Develop a unique selling point and use that in your marketing
4. Explore New Markets and Niches

By exploring new markets and niches, you are making every effort to help your business grow.
Incorporating diversification and unique market categories, your business will strive. Staying in
the same market or niche for too long risks the dangers of entering the ‘decline’ stage of the
Product Life Cycle much quicker than not. In the challenging economic times that we are
currently in, it is evermore important to constantly find new products or services to provide for
new and prospering markets. Not only will this diversify your business, it will also allow for new
and improved revenue streams.

However, this may be a risky strategy to focus on. Many business owners are finding that
diversifying products or trying to incorporate new markets all at one time is a delicate balance. Try
to focus on your new product through mindful processing of information gained from your initial
target market. My one tip for you when trying to expand to other areas is to carefully and
strategically focus on one issue at a time. This will help reduce the amount of adjustments needed
in future ventures. Spotting and exploiting new market opportunities for your products allows for
your offering to enter into uncharted territory, and the positive results could be that of remarkable
success.

5. Consider Continuity Programs or Other Recurring Revenue Programs to Extend the Life
Cycle

Continuity programs, or other recurring revenue programs, can provide higher retention rates and

keep costs of marketing to the consumer much lower than that of reaching out to new consumers.

In the economy crunch we are in today, successful continuity programs provide relief to

businesses, simply because they offer expected revenue streams.

Depending upon its execution, the continued success of any continuity program varies. Most
monthly continuity programs only have a retention rate of about 3 or 4 months. The success
towards extending the product life cycle begins with promotion and how it is positioned within the
market. Certain elements need to be considered in a continuity program, these may include:
Offering free trials or multiple payments
Making sure payment charges are right – the first time
How often you are engaging the customer and holding their interest.
Tracking how often the customer is consuming the content
If it is a physical product – process shipments right the first time for the consumer
Fulfilling future orders must follow suit as well, and including accessible and active customer
service is critical. Through these steps, customers are treated with the utmost care leading to a
more successful continuity program, extending the growth and maturity of a Product Life Cycle.
The goal is to make purchasing easy and thoughtless for the consumer. Also, extend customer
relationships with new and additional offers.

Conclusion

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 Stage – This stage of the cycle could be the most expensive for a company launching
a new product. The size of the market for the product is small, which means sales are low,
although they will be increasing. On the other hand, the cost of things like research and
development, consumer testing, and the marketing needed to launch the product can be very high,
especially if it’s a competitive sector.
Not all products follow this life cycle precisely, and time periods will differ among product or
service offerings, depending upon many market factors. Each offering will experience different
time spans in each stage, or may never make it past research and development. But how you go
about certain business related activities could affect how your product travels through the Product
Life Cycle.