Product Life Cycle: understanding, stages, and factors that influence it
Just as a business through stages, as well as products and services. The product life cycle or Product Life Cycle is determined by how long it can be marketed. Track the life cycle of your product or service is the key to determining performance and profit.
Product Life Cycle also plays an important role in marketing strategies. Depending on the stage of the product or service that your business offers, you will perfect the appropriate marketing method to help ensure optimal performance and results at each stage.
Let us know in depth Product Life Cycle, then check to connect the product life cycle that will affect your company’s marketing strategy.
What is the Product Life Cycle?
Product Life Cycle or product life cycle breaks down various stages of product evolution, from his debut to the termination.
Each phase comes with characteristics, demands, and challenges. All products run through various stages during their existence, and the product life cycle breaks down into certain stages with different characteristics. Even though there are many versions and variants, the product life cycle generally consists of the following period Lime:
Awareness of which stages currently occupied products is very important because this stage must determine many approaches to management, sales, marketing, and product support, ranging from positioning and prices to feature and priority development.
5 Stages of Product Life Cycle
As we explain above, the life cycle of a product is associated with marketing and management decisions in business, and all products through five main stages: development, introduction, growth, maturity, and decline.
Each stage has costs, opportunities, and risks, and each product is different in how long they survive at each stage of the life cycle.
The product development stage is often referred to as the “valley of death”. At this stage, costs are accumulated without appropriate income. Some products need years and large capital investment to develop and then test their effectiveness.
Because the risk is high, the source of funding from outside becomes limited. While companies that exist often fund research and development of income generated by current products. In the stub business, this stage is usually funded by entrepreneurs from their resources.
The introduction stage is about developing markets for products and building product awareness. High marketing costs at this stage, because it needs to reach potential customers.
This is also a stage where the protection of intellectual property rights is obtained. Determination of product prices may be high to recover costs associated with the product life cycle development stage and funding for this stage usually through investors or lenders.
At the introduction stage, the product enters the market and the business looks to get a foothold on the sales stairs by:
- Set a brand and guarantee the market for new product quality.
- The initial low price policy to enter the market, although, with a little competition, prices may be high at first to cover development costs.
- Selection of distribution models to enter products to the market.
- Product promotion by directing it in certain target groups such as online forums.
In the growth phase, the product has been received by customers, and the company seeks to increase market share. For innovative products, competition is limited to this stage, so prices can remain at a higher level.
Requests and product benefits are increasing, and marketing is intended for wide audiences. Funding for this stage is generally still through lenders or an increase in sales income.
At the stage of growth, you will see developments that begin to occur to the next level by:
- Maintain product quality and add extra services or support to become clear during the introduction.
- Maintain prices at a good level to maintain sales growth.
- Increase distribution and look for new ways that are faster to enter products to shelves.
- Marketing campaigns are intended for wider audiences and to increase product market share.
At a mature stage, sales will be horizontal. Competition increases, so product features may need to be increased to maintain market share.
Although sales units are at the highest point at this stage, prices tend to fall to remain competitive. Production costs also tend to decrease at this stage because it is more efficient in the manufacturing process. Companies usually do not need additional funds at this stage.
To go through this stage, the company must:
- Adding features that will make products different from the inevitable competitors entering the market.
- Price cuts to fight competition.
- Revise the distribution channel and use incentives to encourage stores to store your products rather than newcomers.
- A new promotion that aims to show differences between products.
FACTORS AFFIRMATION PRODUCT LIFE CYCLE
The stages discussed above reflect the milestone of the achievement of a product in his life cycle. The duration is difficult to predict, and the boundary between phases is blurred.
In addition, at any stage, a series of unexpected factors can arise and affect the product life cycle. Usually, this problem is beyond the control of producers and, for this reason, it becomes very dangerous.
Factors that affect the product life cycle are not limited, and we will only include some of them:
Scientific discovery and technological advancements
Scientists can make sudden discoveries by considering, for example, the ingredients you use in production. Similar to the Teflon case, this finding might show the harmful effects of the material, which underlines the toxicity of your product.
Movement and social views affect the market in bulk and impose requirements for consumer goods.
For example, environmentally friendly product trends arise from postulates of social activists. The views that are proclaimed and combined by the average consumer require your product to adjust the situation.
What is fashionable and being a trend today may be forgotten or become the theme of taunts tomorrow. If you are not an innovator, the risk of your product will be considered out of date will grow.
The appearance of a competitive substitute
A cheaper, designed alternative, more comfortable, and generally more interesting for your product might just appear and attract your customers’ attention, steal your market share.
The worsening relationship between countries can cause a decrease in trade or even termination. If your product is targeted at foreign markets, you might lose most of your customers.
The economic crisis can cause impoverishment and influence the purchasing power of customers. If only a small portion of the initial customer base you can buy your product, you need to think of alternative niches, cheaper production methods, and other ways to keep your product affordable and requested.
Product Life Cycle, with all stages, characteristics, benefits, and challenges, is a useful conceptual framework. As a developer, manufacturer, manufacturer, you can make a measurable scheme and plan to know where your business phase is located.
Even though you cannot predict exactly what will happen to your business, but you have an outline of how things have to walk in the ideal scenario.
You can plan your previous marketing strategy for the maturity and decrease stages, think of danger and risk factors that might interfere with the cycle, and make B. plans.
There is no guarantee that your product will develop from stage to stage, fulfill all expectations and follow the changes in the specified indicator.
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