Marketing strategy is implemented by many marketing professionals to gain maximum revenues / Profit. Every leading organization wants to be at the top and at the eye of the customers.
Today in this tough competition market, all organizations have only one common goal, which is, to earn more profits by selling their products.
Thus product life cycle is one of the factors that determines the profit earning of the company.
Product life cycle deals with three stages of a product which plays a crucial role in the performance of the product and how the company maintains its standard in order to meet the demand of the customers.
The product life cycle also tells us about a generic view considering all the products that are available in the market undergoing through those 3 stages.
Now we will elaborate on the following topics
1. What is the meaning of the Product Life Cycle?
2. How many different stages of the Product Life Cycle?
3. Are there any benefits of using PLC?
4. How the product life cycle is used?
Now we start our discussion with the first one
What is the meaning of the Product Life Cycle or what is the definition of the product life cycle?
The product life cycle is associated with the management and marketing decisions within the business. It involves stages which a product has to undergo and is determined how long they stay in the life cycle.
All the products undergo primarily 5 stages.
These stages are applicable to all the products that are in the market or are coming to the market.
The product life cycle determines how long are they being sustained in the cycle.
What are the different stages of the product life cycle?
There are 5 stages of the life cycle that a product has to undergo.
These 5 stages are 1) Development 2) Introduction 3) Growth 4) Maturity 5) Decline.
Now we will elaborate on these stages
The development stage is the very beginning stage. Here the product is being developed by a company to be launched in the market.
In this stage, a product is released in the market and is being introduced among the consumers. This stage is crucial for any company as it is completely new in the market and the customers don’t have any knowledge of the product. Some companies tend to expand more on it through advertisements. Whereas there are companies that put a limitation on its advertisements and marketing.
It is the third phase of the life cycle. Here all companies expect to generate more and more profit through the product. The growth phase generally is a belief among the companies that their products would be purchased by the consumers and the maturity of the product would never come. This is not true all the time. Some product growth is huge whereas there are some products whose growth stage is very low. This happens due to poor marketing strategy or due to excessive marketing strategy which is taken by the company management to promote their products extensively.
The stage when consumers have purchased the products and there is no more growth rate of that particular product, that stage is called the maturity stage. In this stage, the growth of that product becomes stagnant since all the consumers have bought the product. Here, we generally observe that many companies strategies their products in such a way that a product that has attained the maturity stage will not incur any more profit for the company. So they launch a new product which will incur more profit compared to the previous product. Further, it is also being observed that a company whose product launched earlier, generated a sizable profit will not again use more advertisement/ marketing for their new product which they are launching. The brand image of the product, the sizable customers of the product will itself help in the growth stage. Hence, leading companies useless marketing strategy for the launch of the new product.
In this stage, the product which has attained the maturity stage now starts declining in the market. Let us take an example here. Nokia, a giant market player in mobile phones had good customer growth compared to other companies… So when other companies introduced smartphones with android features, Nokia, lost all its potential customers and all its products went to decline stage. Now Nokia strategized their plan in such a way that they again came into the market with a new variant of mobile phones that are on par with the other leading phone companies.
So we see that the 5 stages are essential for any product from launch to decline and have to undergo through it. It is not necessary that all the product’s growth stage will be increasing. It depends upon the preference of the customer, the performance of the product.
Let us take another example. Windows, a leading giant in the software industry launched its new software called Windows Vista in the year 2008. Previous to that Windows XP had tremendous growth and it was not going to maturity stage. Windows Vista’s complicated software reduced its customer growth drastically. So Windows released another version, a modified one called Windows 7 and it attracted a significant number of customers towards itself. So we see from above the example, that the performance of a product does play a crucial role in the growth stage.
Are there any benefits of using the Product Life Cycle?
The product life cycle is a crucial stage for any product. It helps the companies to know
How the product is working in the market?
Are consumers truly enjoying using the product?
Is there a significant number of customers towards their product?
The R.O.I gained after launching the product.
How the product life cycle is used?
It is very important for a company to understand while reviewing a business as to where its product lies and how much is their market share considering the global market, which can be analyzed using the BCG matrix.
If the company finds out their product is in fact in the decline stage then they can have many options to overcome it. Like for example, they can release an advanced version of the product, or they can cut the price of the previous product and release a new version of the product at a higher price.
There are many companies, implementing the Product Life Cycle strategy for their products.
Some best example includes AMUL. Amul is famous for its dairy products in India. The products of this company are always in maturity and not in a declining stage. Since many customers are loyal to its products.
So this is about the Product Life Cycle.