Have you ever wondered about the product life cycle? This concept refers to the evolution of the sales of an item over time: its variation determines the marketing mix strategies to be implemented. Let’s get to know it in detail!
In this article we are going to see in detail the life cycle of a product, from what it is and its stages to strategies and examples.
But first a word about the marketing mix. Also called “commercial mix” or “marketing mix”, it refers to a series of tools or variables that help us to meet the objectives set out in our marketing plan.
The marketing mix is made up, in principle, of “the classic four Ps”: product, price, place and promotion. For this article we are going to focus on the first.
The product (or service) that every company needs to sell is what is offered in the market for acquisition, use or consumption. This must always be aimed at satisfying a need, intention or problem of the consumer.
If you want to learn more about this, we recommend you read our article on.
Now yes, let’s go fully into the life cycle of a product! If you’ve never read about this or aren’t quite sure what it’s all about, bookmark this page and let’s get started.
What is the product life cycle
The product life cycle is the evolution process that an article or service goes through from its conception until it is withdrawn from the market.
Philip Kotler, father of modern marketing, wrote in his book Fundamentals of Marketing (2003) that:
The product life cycle (PLC) is the course of a product’s sales and profits during its existence.
Philip Kotler
In other words, it refers to variations in sales and management strategies to keep the product active.
Why do products have life cycles?
No item or service is eternal, they all come to an end at some point.
It may be that in a historical moment it is an enormous technological advance, for example, and that we cannot imagine the world without it. But there is always the possibility that an overcoming invention appears or that the needs of the market change and it ceases to be relevant.
What is planned obsolescence?
This term refers to the programming of the useful life of a product. It is the period of time (or uses) that must elapse before a product becomes useless or obsolete.
This time frame appears to have shortened markedly in recent years, in part because of corporate intent to increase demand for products by requiring consumers to purchase products multiple times.
Does every product have a life cycle?
Yes, since this life cycle does not only occur in technological products that undergo mutations and the appearance of new products to solve, in a more effective or simple way, the same needs; but in all fields.
Products such as food, clothing, toys; all are reached by the same logic and by the evolution of the market. This is due to the basic principle that any product that no longer meets the demands of future consumers is destined to die.
This is where the investigation and proper management of these life cycles play an important role, in such a way that they allow companies to collect information on the demands of both current and future customers.
What factors influence the life cycles of each product?
When managing these life cycles, it is essential to bear in mind that there are many factors that influence:
- Seasonality: products that are not useful throughout the year tend to have less permanence in the market.
- Originality: new products usually have significant sales at the beginning of their launch, encouraged by the curiosity of consumers. If the fad is fleeting and the product does not respond to a need, it may not last.
- Launch accuracy: Responding to a real need at the “perfect time” is the key to product success.
How to define the life cycle of a product?
- Market analysis. By determining the variability of an industry, it is possible to predict what the life cycle of the rest of the products in that market will be like.
- Evaluation of consumer acceptance. The degree of consumer approval of a product defines how long its life cycle can be.
- Study of the competition. Analyzing the competition is essential to determine the length of the life cycle. For example, if it is a product that is easy to replace, replicate or improve, then its cycle is going to be short.
What strategies work in each phase of the cycle?
Every cycle is made up of a series of phases that are repeated in the same order. There are four stages in the life cycle of a product: introduction, growth, maturity, and decline.
The marketing mix comes into play when identifying and analyzing the period in which the product we are offering is found. In other words, if we recognize the stage it is going through, we will be able to design better marketing strategies in terms of price, place and promotion to enhance it.
Let’s see it in detail?
Stages of the life cycle of a product
In this section we are going to learn about each of the stages of a product’s life cycle and analyze how the variables of the marketing mix behave in order to define which strategies make the most sense to implement at each moment.
From the consumption approach, that is, from the analysis of the variation in sales, the product life cycle goes through these phases:
Introduction
The introduction phase begins when the product is available for sale.
The protagonist at this time is communication and it must be strategic. This is the time to announce your product launch and tell buyers why they should try it.
The strategy: publicize the novelty
It’s time to promote that novelty and encourage consumers to experience your product.
Returning to the variables of the marketing mix, the , for example, will have a mostly informative tone because it must present the article or service and highlight the innovation it brings to the market.
In other words, the goal is to spark appeal and encourage initial acquisition. What are the new features that make it stand out? What attributes make it stand out?
A very good idea at this point in the product lifecycle is to push a recommendation system. Recommendation marketing or referral marketing is about generating satisfaction in a client so that, later, he recommends the product to his acquaintances.
For example, if you are launching a mobile application, you can generate a link to invite friends to download it and this implies some benefit for the person. Word of mouth has mind-boggling potential!
Know more:
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Increase
When the product life cycle reaches the growth phase, the company is doing very well. Indicators are an increase in sales and customer acquisition channels.
This is great news! The income that in the first phase was surely not enough to replace the investment, now leaves room so that you can allocate it to more technical advances and new forms of promotion.
With regard to advertising, if it was informative in the first stage, at this time it takes all the cards of persuasion to keep that product or service at the top.
If until now there was no competition for this market, it is likely that at this time it will be formed.
Other companies may launch similar products but with a lower cost or some new feature. It’s time to double the bets! Here the initial and brand positioning strategies will be key.
The strategy: go to the next level
Many people already know the initial product and liked it very much, congratulations! At this time it is crucial to implement improvements so that it remains the winning and undisputed option.
Suppose you started your business selling scented candles and your sales are increasing because you are running a good outreach campaign on social networks.
In order not to put this growth at risk, it will be a good idea to create an online store where you can display your products and strengthen your brand image on your own website.
If you already have one, this is one of the stages of the life cycle of a product where it is convenient to strengthen your authority in the market.
We recommend you design a nutrition flow strategy. This is a concept that includes marketing techniques from which potential customers strengthen their relationship with the brand and thus become real consumers.
Maturity
When the product life cycle lands in the maturity phase there is a key word: persistence. This must be the north that guides all actions and strategies.
Going through the stages of development, introduction and growth of the item or service you offer left you with a lot of experience. This trajectory is invaluable and will help you to continue designing strategies that make sales last.
Reaching the stage of maturity means that the product can safely withstand competition and, furthermore, is likely to be able to survive economic crises.
As you can imagine, staying in this stage is not easy. The most important thing is to keep an eye on new trends and market demands. Don’t let your product get left behind!
Between the stages of a product’s life cycle, maturity is characterized by retaining more than ever the customers you were already able to capture and making sure that your product continues to be their choice. This is not the time to address totally new audiences, but to strengthen yours.
The strategy: branding in all its splendor
Your product or service is well known in the market and sales are no longer growing significantly because they have reached a point of stability.
It is in the maturity phase when competition becomes the real and greatest risk. Let’s think that, while our product is consolidated, another entrepreneur or business may be launching an innovative article or moving on to the growth stage.
More than ever, resisting the competition is the key to going through and prolonging the stage of maturity in product sales.
Undoubtedly, the investment continues to be put into multiplying the attributes, continuing to perfect the product and strengthening the relationship and credibility with your customers. It is time to implement and show off the best, branding and content.
Slope
We have reached the last stage and, of course, the one that every company tries to avoid. The moment of decline is the signal that the product is withdrawing from the market.
The previous phases can extend for months, years, decades, until almost…
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