Product Life Cycle Marketing: The 5 Stages & Examples

  • The different stages of the Product Life Cycle
  • Benefits of the Product Life Cycle for businesses
  • What is understanding your product’s journey in the market important?
  • Examples of the product life cycle
The Product Life Cycle (PLC) is an important marketing concept that refers to a product’s journey, from its introduction to the consumer until discontinuation. Wondering how this is important and relevant to you and your business? Why do you need to know this? It could help you predict the shape of growth for your products and allow you to devise strategies that align with the different stages of demand. Marketers who employ old strategies to attract customers to new products will likely find that scenario fails. Familiarise yourself with the Product Life Cycle, which consists of five stages – introduction, growth, maturity, saturation and decline, to better your chances of producing strategies that will sustain the longevity of your products amid increased competition.

What is the Product Life Cycle?

The Product Life Cycle refers to analysing the journey that a product takes after it is first introduced into the market until it is withdrawn from shelves. The product life cycle must be considered by all businesses: from new online businesses to the global tech giants. Firms use PLC analysis to determine the behaviour of their product at all stages of the product journey to assess what actions need to be taken to meet market demand. No company wants its product to become “obsolete” and reach the end of its life cycle. Hence, it’s essential to understand the journey your product undertakes to make more effective marketing decisions. The concept was conceived by German-American Economist Theodore Levitt, a monumental figure in the marketing field. Mr Levitt proposed a five-stage model about the characteristics of product change during its life cycle, which he termed the Product Life Cycle. The five stages he developed all explore specific issues and features of a product’s journey in the market to help marketers and administrators answer questions such as: When is the right time to place my product on the market? When should I discontinue a product? What needs to be improved? What’s interesting about the product? These are the types of questions that the Product Life Cycle analysis can help you answer.

What are the five stages of the Product Life Cycle?

If you’re ready to grow and mature in the marketplace, continue reading to learn more about the different stages of the product life cycle and how you can exploit them to achieve your marketing goals.

Stage One: Introduction of the Product Life Cycle

Before we get into stage one, we should note that the PLC can be categorised into six stages; the one not being heavily discussed in this article is the “development stage”, which crosses over into the “introduction stage”. The introduction stage refers to the point at which the product is first introduced into the market. Before releasing your product into the market, undertake extensive research to boost your chances of success – develop prototypes, test the effectiveness of the finished product and develop a strategy for launch. While this stage tends to be naturally integrated, the success of a potential product will rely on any planning that preceded its introduction. As sales tend to be low when a product is first introduced into the market, businesses should prioritise advertising at this stage of the PLC. Create some hype around your product, educate your audience on how it could be helpful to them and employ marketing strategies that encourage interaction. Big brands tend to use TV marketing for advertising their products.  However, the steps to conversion have become more complex due to increasing sources of information available to users. While TV ads are successful due to the sheer number of people you can reach, marketers could have just as much, if not more, success by marketing across multiple channels, such as social media sites, email marketing services, websites and direct mail. It’s not uncommon to suffer a loss in profit at this stage as it demands the most financial investment from the company. That’s why it’s essential to thoroughly research your target audience and gain insight into your brand’s customer persona to limit any potential headwinds. At this stage on the PLC, businesses can get a first sense of how customers interact with their product and indicate how successful or unsuccessful it may be moving forward. The principal goal of the introduction stage is to generate interest around your product to build demand.

Stage Two: Growth in the Product Life Cycle

By the growth stage, consumers should have accepted your product, and its popularity should be driving sales. The main characteristics of the growth stage are:
  • Scalable sales
  • Maintenance of costs invested in marketing
You should also find that other companies have become aware of your product. If competition is intense, you might want to continue heavily investing in advertising to edge out competitors. Be mindful that it could take time to enter the growth stage, so avoid getting discouraged if you see negative results in the introduction stage. Note that increased competition could also drive the prices down to make products more competitive, so your investments must continue. At this stage, you want to focus on employing strategies that will increase your product’s market share and maintaining the production of output, whether that is related to content, training, services or the product itself. Many companies fail at this stage, drowned out by the competition, and as a result, their product’s life cycle is also drawn short. To improve your chances of progressing to the maturity stage, ensure you develop a strategy that will help establish your brand’s presence to encourage consumers to pick your product over competitors.

Stage Three: Maturity phase of the Product Life Cycle

The maturity stage refers to when sales have hit their peak and begin to stabilise or even stop – indicating a highly saturated market. At this stage, companies can begin to lower their prices to remain competitive and maintain their market share. However, firms should also find the time to learn from the mistakes they made during the introduction and growth stages to become more efficient. The challenge during this stage is to maintain solid results while fending off the competition and managing lower demand. Companies often think of ways to innovate or enhance their products to maintain or increase market share. However, it’s important to understand that your brand will be subject to market instabilities and behavioural changes, so you should be concerned with boosting visibility at this stage.

Stage Four: Saturation in the Product Life Cycle

As competitors are now occupying a significant portion of the market, you’ll need to focus on differentiating your product from the competition. How can you improve your product’s features, boost brand awareness and customer service so that you become the brand of preference? A highly saturated market could result in a decline in sales. Innovate your product or make customer service a significant part of your marketing efforts to counteract this possibility.

Stage Five: Decline in the Product Life Cycle

The decline stage is inevitable for every company. No matter how much you invest into the maturity and saturation stages of the PLC, changes in consumer behaviour cause sales to drop. That is true even for well-known brands such as Coca Cola and Apple, which have to produce new products or harvest them by reducing the product’s price and the associated marketing costs. For example, Apple’s iPod has entered the decline stage, with former iPod users no longer using the product now that they can stream and listen to music on their phones. It’s important to recognise when your product has entered the decline stage, as investing heavily in the market to try and restore its performance could be financially damaging.

Why is understanding the Product Life Cycle important?

Now that we’ve delved into each stage of the PLC, you should understand why it’s important to apply this model to your business. The main advantages and benefits of adhering to PLC principles are:
  • Aids in planning appropriate marketing strategies
  • Optimise marketing investments
  • Implement strategies to prolong a product’s profitability
  • Easily track and evaluate decisions made for each stage
  • Greater control over results
  • More appropriate preparation to face competition
  • Assign staff to specific stages based on their areas of competency 
Firms can also use the Product Life Cycle model to observe the life of their services and help them assess the required type of investment and the possibilities for return.

Product Life Cycle examples 

Although we briefly touched upon how the PLC works in practice for Apple, we’re going to go into a more in-depth review of some real-life examples.

Product Life Cycle of the Floppy Disk

Floppy disks were popular and widely distributed during the early days of computing, allowing users to transfer files and store data between computers. However, they were soon replaced by memory sticks and hard drives, which are now being drowned out by cloud storage as memory storage means. Introduction: The first floppy disk was introduced in 1971 by IBM and became a popular, portable storage format. Growth: It was popular between the 70s and the 90s, with other brands such as SONY, Maxell and Matsushita also developing versions of the floppy disk drive. Maturity: It sold significantly well during the early-to-mid 1990s due to increases in storage capacity. Saturation: Major competitors emerged in the early noughties, with the invention of USBs, external hard drives and CDs giving people more options to store and share data. Decline: The floppy disk was superseded by more reliable, high-capacity, fast-transfer storage devices in the 21st century. By 2011, the product was discontinued, with SONY being the last ever to manufacture them.

The Product Life Cycle of Coca Cola

Coca Cola has reached the maturity stage in most countries, dominant in the Western world, Asia and Africa, where it still has growth potential. Introduction: Coca Cola was launched in 1886 by Dr John S Pemberton and placed on sale for 5 cents a glass. Growth: By 1895, Coca Cola was consumed in all US states, and increased demand saw the drink made available in bottles rather than just through soda fountains. Maturity: New products were developed, e.g. Coke Zero and the brand expanded its distribution channels to enter new market segments. It has spent most of its history until now in the maturity stage. Saturation: Net operating revenue has fluctuated for Coca Cola since 2012 due to increased competition. Decline: The COVID-19 pandemic sends sales decreasing, and the company is forced to make redundancies to cut costs. However, Coca Cola continues to invest in marketing efforts and new products in hopes that recovery from the pandemic will boost sales.

Monitor your product’s life cycle

The PLC is beneficial as it enables businesses to establish strategies that can better position their product in the market depending on the stage that it’s in. Whether you’re developing a new product or marketing a well-established brand, use the Product Life Cycle as a guide for your campaigns, as it will help you determine how best to inform your audience about your product. Even if you’re a digital marketer and aren’t selling physical products, you’ve learned some tips for creating an effective marketing strategy, resulting in a higher return on investment (ROI).

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