What Is Product Life Cycle?
In the constantly-evolving world of entrepreneurship, understanding the product life cycle remains as crucial as ever. The path a product takes from the beginning to the end of its life is a fundamental journey that every entrepreneur should be able to confidently navigate.
In this article, we'll look closely at the product life cycle. We’ll answer the question: “what is a product life cycle?” and discuss product life cycle stages, its advantages and disadvantages, ways to manage it effectively, and examples of real product life cycles. If you're an aspiring entrepreneur, get ready to explore how the product life cycle plays a critical role in your business’s odds of success.
What Is the Product Life Cycle?
The product life cycle (different from the product development life cycle) is a framework that outlines the different stages a product goes through, from introduction to eventual decline. Essentially, product life cycle is a way to understand how a product evolves throughout its time in the market, starting when the product is first introduced and ending when it's fully phased out of production and distribution.
It's crucial to be familiar with the concept of product life cycle because it acts like a guide that offers insights into the obstacles and opportunities that might come your way during your product’s journey. Think of product life cycle as a helpful tool that can assist you in making smart choices regarding product development, marketing, resource allocation, and more.
The product life cycle has different stages, each with its own set of challenges and requirements. By getting a handle on each of these stages, you can customize your strategy to boost the chances of your product doing well, reduce risks, and navigate market changes more effectively.
Product Life Cycle Stages: How It Works
The product life cycle is typically divided into 4 consecutive stages:
1. Introduction Stage
The introduction stage is the product's debut in the market, marking its official launch. The primary purpose of the introduction phase is to make your target audience aware of your product. During this time, the challenge is twofold: get people interested in the product and convince them of its unique value proposition.
In the introduction stage, companies often invest heavily in marketing to inform people about the new product — explaining what it can do, its perks, and what makes it different from the competition. The introduction stage is the best opportunity to build a strong starting point for the product and carve out a space for it against competitors. Your success during this phase sets the tone for every subsequent phase, making it a crucial span in the life of the product.
2. Growth Stage
After successfully getting through the introduction stage, the product moves into the growth stage. During the growth stage, there's usually a big increase in sales. Good word-of-mouth and effective marketing play a role in encouraging more people to adopt the product. It’s important to take advantage of this momentum and respond by increasing production, improving the product, and looking into new markets for possible expansion.
In the growth stage, sales increase because more customers are adopting the product. As the product becomes more popular, the competition will also heat up, so it’s a good idea to focus on making your product stand out. Besides keeping your product features competitive, you can also try forming strategic partnerships to find new growth opportunities and adapt to changing market trends.
3. Maturity Stage
The maturity stage is when sales and market reach a stable point. By now, the product is widely accepted, and the market gets even more competitive. During this stage, you should switch your focus from rapid growth to maintaining your share of the market. You can do this with strategies like further differentiating your product, improving product features, and finding new marketing angles or new market segments to tap into.
When sales are stable, it means the product has reached a point of market saturation, so you’ll need a deliberate plan to attract and retain customers. For example, the intense competition at this stage can lead to price wars, which means you’ll have to develop a clever pricing strategy to stay on top. Differentiating your product in terms of quality and branding also becomes exceptionally important in the most crowded markets.
4. Decline Stage
Eventually, every product goes through a decline stage where sales drop because consumer tastes change or new technologies arise. In the decline phase, you’ll need to make some important decisions, like whether to try selling your product to a new audience, add fresh value to rejuvenate consumer interest, or stop selling it entirely and move on to a new product.
Sales generally go down during the decline stage because the product isn't as popular anymore or there are better options available. Every entrepreneur has to be proactive in thinking of new ways to deal with this situation. Even though the decline stage is challenging, it's also a chance to either breathe new life into an old product or pivot strategically to a new product.
The Pros and Cons of Product Life Cycle
While the product life cycle provides a valuable model for understanding the journey a product takes in the market, there are also some important drawbacks to consider. Let’s compare some of the main pros and cons of viewing your business in terms of the product life cycle framework:
Pro: Strategic Planning
The product life cycle is like a roadmap for strategic product planning. Entrepreneurs can use it to predict challenges and opportunities at every stage, helping to make proactive decisions. By treating the product life cycle as a guide, you can see what challenges and opportunities might lie ahead and better plan for them.
Whether you’re entering a tough market with an existing offering or launching a brand new product, understanding the product life cycle will help you make smart, informed choices. You can use your knowledge of the product life cycle to build contingency plans and develop strategies for dealing with possible roadblocks, which provides an invaluable degree of flexibility.
Pro: Resource Optimization
Knowing the product life cycle also helps you make smart choices about where to invest your money at each stage. You can plan your budget based on what each stage of the product life cycle requires — avoiding spending money when it's not necessary but making certain you have enough resources allocated exactly where and when they're needed.
For example, in the introduction stage, when it's most important to focus on raising brand awareness, it often makes sense to spend more on marketing. On the other hand, in the later stages when the product is well-known or sales are slowing down, you can often cut costs strategically without hurting product quality or customer satisfaction. This type of smart resource allocation can help to protect the financial health of your business and keep it strong in the long run.
Pro: Market Adaptability
The product life cycle supports the idea of a flexible marketing strategy that adjusts to changes in consumer preferences and market trends. When you understand each stage of the product life cycle, you can customize your marketing efforts to match what your target audience wants at that time.
As your market evolves, you can shift your strategy to introduce new product versions, complementary products, or additional differentiating features. This flexibility ensures your product stays consistent with what your consumers expect and helps to keep them engaged.
You can also use your awareness of the product life cycle to help you determine when it's the right time to enter a new market or exit one where your product isn’t doing very well. This flexibility ensures you are always funneling resources toward the best opportunities with the greatest abilities to fuel business growth.
Con: Uncertain Life Cycle Stage Duration
One of the main challenges for entrepreneurs who rely on the product life cycle model is that the time a product spends in each stage can be unpredictable. Even though the product life cycle includes clear phases like introduction, growth, maturity, and decline, how long a product stays in each stage can change a lot from company to company (and even from product to product). The length of each product life cycle stage depends on factors like market conditions, emerging technologies, consumer preferences, and unpredictable factors like world events.
For example, a product might keep growing for a long time because a large number of people want it or because the marketing is really creative. On the flip side, factors like economic downturns or disruptive new technologies could significantly accelerate a product’s journey through the life cycle stages.
Because of this inherent unpredictability, it can be very tough to set exact timelines for your products using the product life cycle model. It’s important to always remain flexible and have a backup plan ready in case your product’s life cycle doesn’t pan out the way you predicted.
Con: Planned Obsolescence
Another major downside of focusing too heavily on product lifecycle is the possibility of planned obsolescence. Planned obsolescence is when a company exploits the product life cycle by intentionally designing their products to decline in order to create interest in new features or a new generation of products.
While planned obsolescence is, at face value, an easy way to keep customers coming back for more, it will damage customer loyalty in the long run. When customers realize that a company is not building their products to last as long as possible, but rather pre-planning a product life cycle of a certain duration, they are likely to feel tricked and not want to buy from that company again.
Product Life Cycle Strategy and Management
To manage a product's life cycle effectively, it’s important to make careful decisions at each stage.
- In the introduction stage, you should work on generating awareness and interest in your product, as well as finding your niche within your market.
- In the growth stage, your decisions will shift to involve questions like whether or not to increase product production, try out new markets, or team up with other businesses.
- In the maturity stage, your life cycle management strategy should focus on allocating resources efficiently and finding effective ways to maintain your market share.
- In the decline stage, you’ll need to decide whether to stop selling the product, try selling it to new groups of people, or find ways to make the product valuable to your target audience again.
Throughout the life of your product, adaptability will need to remain a critical component of your strategy. It’s very important to keep an eye on what your audience is saying about your product, stay updated on new trends in your market, and be prepared to change your plans as necessary. Being flexible with the direction you take your product can help you keep it relevant in your market for longer.
Effective marketing and branding are also crucial for managing your product's life cycle.
- In the introduction stage, focus on building brand awareness and communicating your product’s unique value proposition.
- In the growth stage, work on building brand loyalty and expanding distribution.
- When the product reaches the maturity stage and the market becomes saturated, marketing needs to become very strategic to help differentiate your product from the competition.
- In the decline stage, marketing might pivot to focus on changing your audience’s perceptions of the product, retargeting it at specific groups, or planning how to gracefully stop selling it altogether.
3 Product Life Cycle Examples
Here are a few great examples of how the product life cycle played out for well-known companies and products:
1. Apple iPhone
The Apple iPhone serves as a quintessential example of a product that has traversed the entire product life cycle. Introduced in 2007, the iPhone experienced rapid growth, quickly achieving iconic status. Over the years, Apple has consistently kept their product line innovative with new models and features, navigating the maturity stage with strategic marketing and continuous product enhancements.
2. Sony PlayStation
The Sony PlayStation gaming console has witnessed multiple iterations, each representing a distinct stage in the product life cycle. From the introduction of the original PlayStation to the subsequent releases of PlayStation 2, 3, and 4, Sony has effectively managed its product life cycle by introducing new features and expanding its target market.
3. Kodak Film
Kodak serves as a cautionary tale of the importance of adapting to changing technologies.With the advent of digital photography, traditional film experienced a sharp drop in popularity and Kodak’s business declined. While the market for their core product was waning, Kodak had the opportunity to pivot towards digital product offerings — a transition that, unfortunately, was not executed particularly successfully.
Master the Product Life Cycle with Help from an Expert
The product life cycle ultimately serves as a useful framework for entrepreneurs that provides critical insights into how their products are faring. It’s also an invaluable roadmap for planning ahead. By navigating each stage of the product life cycle with strategic focus and remaining flexible, you can drive success for your products and build a company that lasts. Whether you’re just beginning your entrepreneurial journey or gearing up for the next chapter, you can use the four stages of product life cycle as your guide.
For more help navigating the product life cycle, you can find real business experts through Mentorcam who are willing to advise you with insights drawn from their own successful careers:
- Derek Edwards is a generative AI engineer with years of experience driving change in highly regulated sectors like life sciences and healthcare. He is widely recognized as a leading expert in the healthcare industry around topics like zero trust, cloud native patterns, and generative AI applications.
- Antoine Bohannon specializes in the people side of engineering, leveraging his experience in both product development and diversity, equity, and inclusion (DEI) to foster more successful product development teams. He currently serves as the head of inclusive engineering at Snap, and has previously lent his product expertise to well-known companies like Activision and DirectTV.
- Charlie Depman is an engineering expert in the mobility and sustainability space with over 8 years of experience building revolutionary mobility technologies. He is a co-founder and the current CTO of Ridepanda, a climate-tech mobility platform that makes it possible for employers to provide their employees with flexible commute options while reducing their environmental impacts at the same time.
Check out all of our available product mentors to book a meeting with one of these experts or find the perfect match for your needs.