Product Life Cycle: Definition, Stages and Examples (2024)

Every product in the retail market goes through four product life cycle stages: introduction, growth, maturity, and decline. Understanding these stages can prevent your hard work from meeting an untimely demise.

By mastering product life cycle management, you can identify where your products lose traction and ensure success at each stage. Here’s an overview of the product life cycle stages and some examples to learn from.

What is a product life cycle?

A product life cycle describes the journey of a product from conception to its ultimate departure from the marketplace. During this journey, a product is introduced to a target market, experiences growth, reaches maximum sales, and eventually enters a decline. 

The importance of this journey to the success of a product means large companies sometimes dedicate team members to product life cycle management.

How the product life cycle works

Every product has a life cycle. It’s born into the market, experiences growth spurts and peak popularity, and eventually declines as it becomes outdated. 

Smart businesses closely monitor where their products are in this cycle. For newly launched products, they’ll ramp up marketing to create anticipation. When it hits its prime, they can ease off and focus on maintaining excitement. And as a product starts to fade, they must decide whether to retire it gracefully or revitalize it with new features. 

By assessing these life cycle patterns, companies can make informed decisions about when to invest, pivot, or move on to the next big thing. 

4 stages of the product life cycle

Each product life cycle stage has defining characteristics that apply across different products. Let’s explore these stages in detail:

1. Introduction

This introduction stage involves launching a new item or service to the public and identifying a target market. 

During this stage, you educate potential customers about your new offering to gain market share. Profit margins may be low—or even negative—because you’re likely spending more on manufacturing and marketing than you earn from sales.

Some entrepreneurs call this the development stage, but that term can be misleading. The development stage occurs at the end of the product development life cycle, where a product goes from idea to prototype to commercially available.

2. Growth

In the growth stage, both demand and competition increase. This often involves increased marketing investments, ramping production, growing profit margins, and new distribution channels.

3. Maturity

The maturity phase represents peak sales volume for a product. 

Ideally, this is the most profitable stage, with sales revenue exceeding marketing, manufacturing, and personnel expenses. In well-run companies, the maturity stage can last for years, even decades. It helps to sell products people always need more of, like tires or tissues, or to have an expansive product concept, like a video game franchise with regular sequels. 

Companies extend their maturity phase through continual market research, customer feedback, and new iterations of existing products.

4. Decline

Most products eventually fade from the market, often due to obsolescence or shifting consumer behavior. 

Decline can also occur when a competitor overtakes you with a better value proposition, product quality, or marketing strategy. A product can enter the decline stage though not disappear entirely for some time.

What factors can affect the product life cycle?

External factors can impact the product life cycle for different brands:

  • Market saturation. Some companies struggle to transition from growth to maturity when the market is saturated with competitors. Well-financed brands can sometimes wait out this saturation, while others may have to fold due to lack of market share.
  • Technological advances. A product can thrive and reach maturity, only to quickly enter decline because emerging technologies have rendered it obsolete.
  • Unsuccessful marketing. Great product design may not be enough to push an item to profitability. Sometimes, the public develops a preference for a competitor simply because of better marketing.

How to extend product life

No one wants to see their hard work fade into obscurity. Fortunately, there are several ways to breathe new life into a declining product and generate fresh interest. 

Consider these strategies: 

  • Create limited-time releases or seasonal variants to spark artificial scarcity. 
  • Bundle declining products with popular new items to boost sales. 
  • Implement subscription or replenishment models to automate repeat purchases. 
  • Leverage user-generated content and influencer marketing for fresh promotional angles. 
  • Experiment with dynamic pricing and promotional offers. 

Smart companies pay close attention to changing customer needs and desires. Evolving your product to align with new trends and demands is critical to fending off a premature decline. With marketing ingenuity and smart product development, you can keep your product in the spotlight indefinitely. 

Customer feedback in the product life cycle

Gathering feedback through surveys, reviews, social media listening, and other channels gives you valuable insight into changing customer needs and desires. 

This voice-of-customer intel is invaluable for steering the product development process. Perhaps your bestseller needs a fresh look or a flavor remix. Or maybe a pattern in reviews suggests it’s time to move on to the next big thing. Either way, involving customers in the process turns them into invested co-creators rather than only buyers. 

Incorporate customer feedback at every stage of the product life cycle. Generating this “micro-feedback” arms you with the right insights as you navigate the life cycle:

  • Introduction: Gather initial reactions and identify early adopters
  • Growth: Monitor satisfaction and uncover new use cases
  • Maturity: Look for ways to refine and improve the product
  • Decline: Understand why customers are leaving and what might bring them back

By listening to your customers, you can make informed decisions about product improvements, marketing strategies, and when to pivot or retire a product. 

3 successful product life cycle examples

To understand the importance of product life cycle strategy for a growing business, here are three real-world success stories:

1. Bushbalm

Bushbalm homepage with image of hands using product on right side and summer sale offer on left.

Bushbalm has found great success with its range of “skincare for everywhere” products. 

Company cofounder David Gaylord points out that marketing, shipping, and manufacturing feed off one another during the growth stage. Establishing support services for each of these components can help with a product’s growth.

“If you’re the marketing person, but also the person who’s either shipping or making the product, the more you sell, the more work you have to do on manufacturing or shipping,” Gaylord explains. “So, you realize if you’re successful in marketing, your time goes completely to shipping and manufacturing.”

Tip: Prepare for growth by establishing support systems for marketing, shipping, and manufacturing.

2. Queer Lit

Queer Lit homepage with “let’s get pride ready” over image of celebratory men with rainbow colors.

Queer Lit is a UK-based bookseller specializing in LGBTQ titles. 

Founder Matthew Cornford started the business as an online-only retailer. To achieve his ideal maturity stage, he realized he needed to adjust his business model by opening a brick-and-mortar store in Manchester.

Cornford explains how opening a physical store created the opportunity for “an in-face conversation with customers that they don’t want to have online. People want to come in and just talk to you, and they want to open up. … When you’re doing that online, that interaction just doesn’t happen in that way.”

Tip: Be willing to pivot your business model to transition from growth to maturity.

3. Kai Collective

Kai Collective homepage with woman in dress holding flowers against a rail with the ocean in back.

Kai Collective founder and fashion blogger Fisayo Longe had 50,000 blog followers before launching her first fashion line. 

Despite having an audience, the initial product line didn’t sell as expected. “So I thought, OK, how can I give people what they want?” Longe says in an interview about debunking the myth of overnight success. “Let me return to my roots and bring elements of my Nigerian heritage into Kai.”

The second launch was wildly successful. “In 2020, we released our mesh marble Gaia print dress,” Longe says. “It’s become really popular—it sells out, and it’s highly imitated now.” 

Tip: Learn from each product’s life cycle and be ready to reimagine your strategy for future success.

Product life cycle FAQ

How do businesses know when a product has entered the growth stage of the product life cycle?

The growth stage typically involves:

  • Branching out to new markets
  • Scaling up production
  • Expanding marketing efforts
  • Hiring more staff

This stage should provide more gross revenue than the introduction phase but may not yield more net profit due to increased investments in marketing and production.

What are some signs that a product is entering the maturity stage of the product life cycle?

The maturity stage is primarily characterized by sustained profit. Products in this phase bring in more money from sales than is spent on operations and marketing.

Is the product life cycle the same for all products and industries?

No, the product life cycle varies among different products and industries:

  • New technologies (e.g., solar power, electric cars) might require decades in the introduction phase before entering growth
  • Items with sustainable customer demand (e.g., certain food staples) can spend most of their existence in the maturity stage

When evaluating your own product’s life cycle, it’s helpful to compare directly with others in your industry.

Can businesses successfully relaunch a product that has already reached the decline stage of the product life cycle?

Yes, products in the decline stage can experience a renaissance. This happens when customer behavior changes, such as when 21st-century musicians took interest in somewhat forgotten synthesizers from the 1970s and 1980s.

To revitalize a declining product:

  • Identify new market segments or use cases
  • Update the product with new features or designs
  • Reposition the product through fresh marketing strategies
  • Consider bundling with other popular products

Remember, understanding your product’s life cycle is critical to making informed decisions about its future in the market.

Source

Leave a Reply

Your email address will not be published. Required fields are marked *