Here I come with study note on product life cycle stages. Every product goes through a cycle from birth, into an initial growth stage, into a relatively stable period, and finally into a declining state that eventually ends in the death
of the product. Since there are challenges and uncertainties any time a new product is brought to market, it is useful to understand these cycles.
This sequence is known as the product life cycle stages. Product life cycle stages is associated with changes in the marketing situation, customer needs, customer economical condition, thus impacting the marketing strategy and the marketing mix. The product revenue and profits can be plotted as a function of the product life cycle stages as shown in the graph below:
Introduction Stage
It is the first stage of product life cycle stages.In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
- We have to established product branding and have to set optimum quality level.
- Also at this stage we have to obtain intellectual property protection such as patents and trademarks.
- Pricing is a very important factor for a product banding. So we may be fixed low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
- New product take time to create consumers acceptance. So we have to set distribution is selective until consumers show acceptance of the product.
- Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
Growth Stage
Growth stage is the second stage of product life cycle stages. In this stage the firm seeks to build brand preference and increase market share. And also build processes of manufacturing, distribution and promotion.
Process development is most important in the materials, chemicals, or food processing industries. In such businesses the product that is sold may be a coil of aluminium to be made into beverage cans or a silicon microchip containing hundreds of thousands of transistors and other circuit elements. The processes that produced this product create most of its value.
When focusing on the development of a manufacturing process for a discrete product, as opposed to a continuous fl ow process like sheet steel or gasoline, it is convenient to identify three stages in the development of the manufacturing process. Not only the process design we also looks on bellow mention points.
- We have to maintain the product quality. And we have to introduce some additional features and support services.
- Again we have to maintain pricing as the firm enjoys increasing demand with little competition.
- We have to add slowly distribution channels as demand increases and customers accept the product.
- We should aimed promotion for a broader audience.
Maturity Stage
At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
- We have to enhanced product features to differentiate the product from that of competitors.
- an other concern is we may cut down the product pricing because of the new competition.
- Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
- Promotion emphasizes product differentiation.
Decline Stage
The final stage of product life cycle stage is decline stage .As sales decline, the firm has several options:
- We ca maintain the product and possibly rejuvenating it by adding new features and finding new uses.
- We also harvest the product – reduce costs and continue to offer it, possibly to a loyal niche segment.
- We may discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.