What are the stages of the product life cycle?
What are the stages of the product life cycle?
The development stage of the product life cycle is the research phase before a product is introduced to the marketplace. This is when companies bring in investors, develop prototypes, test product effectiveness, and strategize their launch. Due to the nature of this stage, companies spend a lot of money without bringing in any revenue because the product isn't being sold yet.
This stage can last for a long time, depending on the complexity of the product, how new it is, and the competition. For a completely new product, the development stage is hard because the first pioneer of a product is usually not as successful as later iterations.
Development Stage Marketing Strategy
While marketing typically begins in the introduction stage, you can begin to build “buzz” around your product by securing the endorsement of established voices in the industry. You can also publish early (and favorable) consumer research or testimonials. Your marketing goal during this stage is to build upon your brand awareness and establish yourself as an innovative company.
The introduction stage is when a product is first launched in the marketplace. This is when marketing teams begin building product awareness and reaching out to potential customers. Typically, when a product is introduced, sales are low and demand builds slowly.
Usually, this phase is focused on advertising and marketing campaigns. Companies work on testing distribution channels and try to educate potential customers about the product.
Introduction Stage Marketing Strategy
This is where the fun begins. Now that the product is launched, you can actually promote the product using inbound marketing and content marketing. Education is highly important in this stage. Your target consumer must know what they’re buying before they buy it. If your marketing strategies are successful, the product goes into the next stage — growth.
During the growth stage, consumers have accepted the product in the market and customers are beginning to truly buy-in. That means demand and profits are growing, hopefully at a steadily rapid pace.
The growth stage is when the market for the product is expanding and competition begins developing. Potential competitors will see your success and want in.
Growth Stage Marketing Strategy
During this phase, marketing campaigns often shift from getting customers’ buy-in to establishing a brand presence so consumers choose them over developing competitors. Additionally, as companies grow, they'll begin to open new distributions channels and add more features and support services. In your strategy, you’ll advertise these as well.
The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies begin to reduce their prices so they can stay competitive amongst the growing competition.
This is the phase where a company begins to become more efficient and learns from the mistakes made in the introduction and growth stages. Marketing campaigns are typically focused on differentiation rather than awareness. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive.
During the maturity stage, products begin to enter the most profitable stage. The cost of production declines while the sales are increasing.
Maturity Stage Marketing Strategy
When your product has become a mature offering, you may feel like you’re “sailing by” because sales are steady and the product has been established. But this is where it’s critical to establish yourself as a leader and differentiate your brand.
Continuously improve upon the product as adoption grows, and let consumers know in your marketing strategy that the product they love is better than it was before. This will protect you during the next stage — saturation.
During the product saturation stage, competitors have begun to take a portion of the market and products will experience neither growth nor decline in sales.
Typically, this is the point when most consumers are using a product, but there are many competing companies. At this point, you want your product to become the brand preference so you don't enter the decline stage.
Saturation Stage Marketing Strategy
When the market has become saturated, you’ll need to focus on differentiation in features, brand awareness, price, and customer service. Competition is highest at this stage, so it’s critical to leave no doubt regarding the superiority of your product.
If innovation at the product level isn’t possible (because the product only needs minor tweaks at this point), then invest in your customer service and use customer testimonials in your marketing.
Unfortunately, if your product doesn't become the preferred brand in a marketplace, you'll typically experience a decline. Sales will decrease during the heightened competition, which is hard to overcome.
Additionally, new trends emerge as time goes on, just like the CD example I mentioned earlier. If a company is at this stage, they'll either discontinue their product, sell their company, or innovate and iterate on their product in some way.
Decline Stage Marketing Strategy
While companies would want to avoid the decline stage, sometimes there’s no helping it — especially if the entire market reached a decline and not just your product. In your marketing strategy, you can focus on nostalgia or emphasize the superiority of your solution to successfully get out of this stage.
To extend the product life cycle, successful companies can also implement new advertising strategies, reduce their price, add new features to increase their value proposition, explore new markets, or adjust brand packaging.
The best companies will usually have products at several points in the product life cycle at any given time. Some companies look to other countries to begin the cycle anew.