16 Dec 2015, 10:25 — 6 min read
All products go through a life cycle – and this entire life cycle comprises various stages. Each stage brings with it, its own set of characteristics. An awareness of what these stages are and the accompanying implications will help the marketer understand how to address the issues that would arise in each of these stages as well as take proactive measures to capitalise on each.
These stages are:
1. Introduction/Infancy Stage – This is the stage when a new product is introduced. Companies spend huge amounts on creating the product and the market’s acceptance or lack of acceptance is often mistakenly becomes a barometer for its success or doom. Instead, Marketers should treat this stage as an important learning and growing up stage. Course corrections can be made to the go-to-market strategy before a major roll out and even minor product enhancements can be made early on, at this stage. In this stage, cost of communication is high, and involvement is high. Consumer engagement can also be high. Companies create a sense of anticipation and also manage all fulfillment activities.
On the buyer side, this stage sees a host of early adopters who have either been waiting for the product (Apple products are an example) – either thanks to the Marketing efforts of the company or influencers and buyers themselves. Companies create a buzz during this stage or even the before the product has been formally introduced. Typically, in this stage, there is very little competition and Marketers have to ensure that they create demand for the product.
In this stage, while launch and related marketing expenses are high, sales volumes can be low. The slack could be deliberate. The product may often have a slow start – but this is not an indication of its likely success or lack of it.
2. Growth Stage – After the initial pangs and a sluggish rise (or euphoria as the case may be) of the introduction stage, the product is now ready to take off. The Market finally accepts it. Reviews, if good, only fuel the demand. The company gets onto a war footing and starts promoting aggressively. Distribution channels are in place as are the teams to take care of this. Sales take a sharp upward curve as the rate of growth itself increases day by day. This stage is usually longer than the introduction or infancy stage.
In this stage, costs are generally lower because the company manages to get economies of scale. Profits in this stage are also high and sales volumes increase steadily and at an increasing rate. Also, there is every likelihood of new entrant coming in and competition intensifying. New entrants are much higher on the learning curve now and therefore their ability to go to market is greater.
3. Maturity Stage – During the maturity stage, the product is established and the manufacturer aims to maintain the market share that they have managed to create. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. Businesses also need to consider any product modifications or improvements to the production process which could give them an edge over competition. In this stage, there is high likelihood of sales peaking and then plateauing. Profits are also likely to go down. The company often introduces variants at the fag end of this stage to keep interest in the product alive.
4. 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. Cost efficiencies also go down at this stage, thanks to the slow growth and lower volumes.
Some Examples of Product Life Cycle
Generally, one could assume that most wearables including FitBit products etc. are in their infancy stage – they are really on the cusp of the infancy and growth stages. Similarly, 3D printing is in the infancy stage. We see some products in the growth stage. These include solutions like 4G, IPTV etc. Netflix is also in the growth stage. The maturity stage is likely to have the maximum number of products since it is the longest stage of all. Almost all the products that we have been consuming for decades are in the maturity stage. These include the humble television, the bicycle, the petrol driven automobile and even the landline telephone.
We would love to see a discussion on this subject. Which stage do you think 3D TV is in? What about the Mobile Phone? Which stage do you see Robots in? And drones?
Posted byGlobalLinker Staff
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