Digital Marketing

The 6 Stages of the Product Life Cycle

November 30, 2022

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Once I was 12 years outdated, I was confused about my cousin’s CD assortment. Why have CDs once I might go on iTunes and hearken to all my favourite songs? This can be a excellent instance of a product life cycle (PLC) in motion.

Nobody needs their product to change into “out of date” and attain the top of its product life cycle. That’s why it’s necessary to grasp what stage your product is in so you can also make higher advertising and marketing and enterprise choices.

Under, we’ll be taught in regards to the product life cycle in and out. Should you’re in a pinch, use the hyperlinks beneath to leap straight to what you want:

What’s the product life cycle?

The product life cycle refers back to the six phases a product goes via throughout its existence, ranging from growth all the best way to say no. Enterprise house owners and entrepreneurs use the product life cycle to make necessary choices and techniques on promoting budgets, product costs, and packaging.

Within the advertising and marketing trade, the standard depiction of the product life cycle solely has 4 important phases — Introduction, Progress, Maturity, and Decline. At HubSpot, we agree that these are very important for a product, however the two phases “Improvement” and “Decline” aren’t almost coated sufficient.

As entrepreneurs, it is necessary to grasp how your techniques and techniques change relying on the stage your product is in. Let’s break down every of the six phases of the product life cycle.

Breaking Down the Product Life Cycle Concept

Within the late ‘60s, Harvard Enterprise College professor Raymond Vernon developed this advertising and marketing principle in response to an financial mannequin that did not account for tendencies current in worldwide commerce – that’s why it was initially referred to as the worldwide product life cycle principle.

It acknowledged that merchandise developed in a world market had three phases:

New product
Maturing product
Standardized product

Right here’s a fast breakdown of his principle.

Vernon theorized a brand new product would carry out finest in its nation of origin to maintain manufacturing and manufacturing prices low. As soon as the product gained demand, corporations might start exporting to different international locations and proceed constructing native manufacturing vegetation in every new location.

Having these native vegetation would provide the flexibleness to make adjustments to the product with out incurring big prices.

The standardized part would contain an inflow of rivals, which might lead the corporate to deal with driving down manufacturing and manufacturing prices to stay aggressive. Because the market turns into saturated and a brand new product will get launched, the corporate loses its relevance in its dwelling nation and shifts gears to create one thing new, with the cycle starting once more.

Since then, the product life cycle principle has developed to focus much less on geography and extra on advertising and marketing. Let’s dive into it subsequent.

You need to use this template to map out your personal product’s life cycle phases.

Download the Free Product Life Cycle Template

What are the phases of the product life cycle?

Improvement
Introduction
Progress
Maturity
Saturation
Decline

1. Improvement

The event stage of the product life cycle is the analysis part earlier than a product is launched to {the marketplace}. That is when corporations usher in traders, develop prototypes, check product effectiveness, and strategize their launch.

On this stage, corporations usually spend some huge cash with out bringing in any income as a result of the product is not being bought but.

This part can final for a very long time, relying on the complexity of the product, how new it’s, and the competitors. For a totally new product, the event stage is especially tough as a result of the primary pioneer of a product isn’t all the time as profitable as later iterations.

Improvement Stage Advertising and marketing Technique

Whereas advertising and marketing usually begins within the introduction stage, you may start to construct “buzz” round your product by securing the endorsement of established voices within the trade.

You may as well publish early (and favorable) client analysis or testimonials. Your advertising and marketing objective throughout this stage is to construct upon your model consciousness and set up your self as an modern firm.

2. Introduction

The introduction stage occurs when a product is launched within the market. That is when advertising and marketing groups start constructing product consciousness and focusing on potential prospects. Sometimes, when a product is launched, gross sales are low and demand builds slowly.

On this part, entrepreneurs deal with promoting and advertising and marketing campaigns. In addition they work on testing distribution channels and constructing product and model consciousness.

Introduction Stage Advertising and marketing Technique

That is the place the enjoyable begins. Now that the product is launched, you may really market it utilizing inbound marketing and content marketing.

Schooling is significant on this stage. In case your advertising and marketing methods are profitable, the product goes into the following stage — development.

3. Progress

Throughout the development stage, shoppers have accepted the product available in the market and prospects are starting to actually purchase in. Which means demand and earnings are rising, hopefully at a steadily speedy tempo.

The expansion stage is when the marketplace for the product is increasing and competitors begins growing. Potential rivals will see your success and can need in.

Progress Stage Advertising and marketing Technique

Throughout this part, advertising and marketing campaigns typically shift from getting prospects’ buy-in to establishing a model presence so shoppers select them over growing rivals. Moreover, as corporations develop, they’re going to start to open new distribution channels and add extra options and assist companies. In your technique, you’ll promote these as effectively.

4. Maturity

The maturity stage is when the gross sales start to degree off from the speedy development interval. At this level, corporations start to scale back their costs to allow them to keep aggressive amongst the rising competitors.

That is the part the place an organization begins to change into extra environment friendly and learns from the errors made within the introduction and development phases. Advertising and marketing campaigns are usually centered on differentiation moderately than consciousness. Which means that product options is perhaps enhanced, costs is perhaps lowered, and distribution turns into extra intensive.

Throughout the maturity stage, merchandise start to enter essentially the most worthwhile stage. The price of manufacturing declines whereas the gross sales are growing.

Maturity Stage Advertising and marketing Technique

When your product has change into a mature providing, you could really feel such as you’re “crusing by” as a result of gross sales are regular and the product has been established. However that is the place it’s crucial to determine your self as a frontrunner and differentiate your model.

Repeatedly enhance upon the product as adoption grows, and let shoppers know in your advertising and marketing technique that the product they love is healthier than it was earlier than. This may defend you through the subsequent stage — saturation.

5. Saturation

Throughout the product saturation stage, rivals have begun to take a portion of the market and merchandise will expertise neither development nor decline in gross sales.

Sometimes, that is the purpose when most shoppers are utilizing a product, however there are lots of competing corporations. At this level, you need your product to change into the model desire so you do not enter the decline stage.

Saturation Stage Advertising and marketing Technique

When the market has change into saturated, you’ll must deal with differentiation in options, model consciousness, value, and customer support. Competitors is highest at this stage, so it’s crucial to depart little doubt concerning the prevalence of your product.

If innovation on the product degree isn’t doable (as a result of the product solely wants minor tweaks at this level), then put money into your customer support and use buyer testimonials in your advertising and marketing.

6. Decline

Sadly, in case your product does not change into the popular model in a market, you may usually expertise a decline. Gross sales will lower through the heightened competitors, which is difficult to beat.

Moreover, new tendencies emerge as time goes on, identical to the CD instance I discussed earlier. If an organization is at this stage, it’s going to both discontinue its product, promote the corporate, or innovate and iterate on its product not directly.

Decline Stage Advertising and marketing Technique

Whereas corporations would wish to keep away from the decline stage, typically there’s no serving to it — particularly if the whole market reached a decline. In your advertising and marketing technique, you may emphasize the prevalence of your resolution to efficiently get out of this stage.

To increase the product life cycle, profitable corporations may also implement new promoting methods, scale back costs, add new options to extend their worth proposition, discover new markets, or modify model packaging.

One of the best corporations will normally have merchandise at a number of factors within the product life cycle at any given time. Some corporations look to different international locations to start the cycle anew.

Now that we’ve gone via phases, let’s overview some real-life examples of them in motion.

Product Life Cycle Examples

The Typewriter
Vine
Cable TV
Floppy Disk

Let’s observe the product life cycle of common merchandise which have since reached the decline stage.

1. The Typewriter

The typewriter was the primary mechanical writing device — a worthy successor to pen and paper. Finally, nevertheless, different applied sciences gained traction and changed it.

Improvement: Earlier than the primary business typewriter was launched to the market, the general thought had been developed for hundreds of years, starting in 1575.
Introduction: Within the late 1800s, the primary business typewriters have been launched.
Progress: The typewriter rapidly turned an indispensable device for all types of writing, turning into broadly utilized in places of work, companies, and personal properties.
Maturity: Typewriters have been within the maturity part for almost 80 years, as a result of this was the popular product for typing communications up till the Eighties.
Saturation: Throughout the saturation stage, typewriters started to face fierce competitors with computer systems within the Nineteen Nineties.
Decline: General, the typewriter could not stand up to the competitors of recent rising applied sciences, and ultimately the product was discontinued.

2. Vine

Skipping ahead to the twenty first century, we see the rise and fall of Vine, a short-form video-sharing app that was the supply for a lot of memes at its peak however ultimately declined because of different platforms.

Improvement: Vine was based in June 2012 and primarily competed with Instagram.
Introduction: The app was launched to the general public in 2013. Its differentiating issue was its short-form video format — customers had solely seven seconds to movie one thing that was hilarious, absurd, or a combination of each.
Progress: Solely two years after its launch, Vine had over 200 million energetic customers. Its recognition led to the appearance of the phrase “Do it for the Vine.”
Maturity: As a result of it was solely available in the market for a couple of years, Vine by no means reached the maturity stage. Whereas adoption was excessive, it was nonetheless a reasonably new app.
Saturation: Vine competed in an already saturated market. Instagram, Snapchat, and YouTube have been the pre-eminent names of their class, and Vine quickly began to say no in use.
Decline: When Musical.ly was launched, Vine misplaced a considerable amount of its consumer base and shut down. It was succeeded by Byte, an analogous short-form video-sharing platform, however none of those have been capable of surpass Tik Tok, which launched months after Vine’s finish in 2016.

3. Cable TV

Bear in mind the times of switching TV channels to search out what to look at? I do — they usually really feel distinctly like one thing of the previous. Whereas cable TV continues to be round, it’s secure to say that it’s nearing the decline stage.

Improvement: Cable TV was developed within the first half of the 20th century. John Walson has been credited with its invention.
Introduction: The primary business tv system was launched in 1950, and by 1962, the expertise noticed the primary hints of development.
Progress: After a decades-long freeze on cable TV’s growth (because of regulatory restrictions), the expertise started gaining traction, and by 1980, greater than 15 million households had cable.
Maturity: Cable TV matured across the Nineteen Nineties. Round seven in ten households had cable.
Saturation: The beginning of the twenty first century noticed an oversaturation of this expertise, and it additionally began to compete with different fashionable developments resembling on-demand companies and high-definition TV (HDTV). Whereas the web was nonetheless in its nascent phases, it could quickly achieve on cable TV as effectively.
Decline: From 2015 onwards, cable TV skilled a marked decline. On-line video streaming companies resembling Netflix and Hulu have taken priority — and this pattern is ready to proceed.

4. Floppy Disk

This relic was as soon as a well-liked and handy technique to retailer and share knowledge between computer systems. I barely understood what they have been rising up, and it astounds me to think about the very existence of cloud knowledge sharing and different mass reminiscence storage means.

Improvement: The primary floppy disk was developed in 1970 by IBM engineers. It was an 8-inch versatile magnetic disk in a sq. case with 2MB storage capability.
Introduction: It was launched in 1971 and largely turned often called the one technique to switch or retailer knowledge.
Progress: The floppy disk was majorly used within the Eighties-Nineteen Nineties.
Maturity: Bought effectively available in the market through the Nineteen Nineties. Enhancing with time, it might maintain 200MB of storage.
Saturation: Main rivals emerged at the start of the twenty first century. The invention of USB cables, exterior exhausting disks, and CDs gave individuals choices to retailer their knowledge.
Decline: The floppy disk confronted a significant decline as much as Hewlett-Packard stopping manufacturing for the disk in 2009. The storage capability for different merchandise available in the market grew to be extra environment friendly.

Not all merchandise must face the decline stage. Firms can prolong the product life cycle with new iterations and keep afloat so long as they’ve a number of merchandise at numerous factors of the product life cycle.

Worldwide Product Life Cycle

The worldwide product life cycle (IPL) is the cycle a product goes via in worldwide markets. As merchandise start to mature and firms wish to keep away from the decline stage, they’re going to usually start to discover new markets globally.

When merchandise attain mass manufacturing, manufacturing and manufacturing shift to different international locations as effectively.

The worldwide product life cycle phases are similar to that of a standard product life cycle. The event stage seems totally different, nevertheless, as a result of native customs and rules can have an effect on how lengthy it takes to carry the product to a brand new market.

Nevertheless, when you lay the groundwork in a brand new market, your rivals will be sure you observe, and the life cycle phases will proceed up till saturation and ultimately decline. Your choice is to both increase into one other market or be taught from prior errors and innovate earlier than the decline stage rolls round.

Subsequent, we’ll have a look at when it’s best to use the product life cycle.

When to Use the Product Life Cycle

Companies use the product life cycle to realize the next:

Set up aggressive authority. In case your product is new and not too long ago launched to the market, you may promote it as a brand new and improved different to an current product. If the product is established, you may vouch for its lengthy historical past of use in your branding.

Determine on a pricing strategy. Relying on the life cycle stage your product is in, you’ll select the best way to value the product. A brand new product could also be priced decrease to entice extra consumers, whereas a product within the development stage will be priced greater.

Create a marketing strategy. Your product life cycle stage will decide which technique to pursue. Maturity and viewers knowledgeability play a giant function in the kind of content material you publish in your website and social media profiles.
Reply earlier than the product begins its decline. There’s no worse feeling than watching your product slowly change into out of date or be displaced by a competing product. By conserving the life cycle phases in thoughts, you may create a method that retains you forward of the curve as you attain the saturation and decline phases.

The product life cycle advantages companies as a result of they will shift their wording and positioning to finest market the product on the stage it’s in. In case your product has not too long ago been launched and also you attempt to promote it as a long-established resolution, shoppers will see proper via it and belief you much less in consequence.

Maintain Your Product’s Life Cycle in Thoughts

Whether or not you are growing a model new product or working with a mature, well-established model, you should use the product life cycle phases as a information in your advertising and marketing campaigns.

Every stage will dictate the way you inform your viewers in regards to the product, the way you place your model within the market, and the way you resolve to maneuver ahead after the decline stage.

By conserving your product’s life cycle in thoughts, you may put money into higher advertising and marketing campaigns that lead to the next ROI.

Editor’s be aware: This submit was initially printed in January 2020 and has been up to date for comprehensiveness.

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