Product Life Cycle

The life cycle of a product is a long and ruthless process and refers to the life of a product in the market with respect to business cost, sales measures and market strategies. Product life cycles endure four different stages and require the discipline of many different professionals. These stages include; Market Introduction stage, Growth stage, Mature stage, and the Decline stage. These stages determine the relevance of a product's significance in the consumer universe.

First, we will examine the Market Introduction stage, review market objectives and determine strategies that some companies my employ to accomplish these market objectives. In the Market Introduction stage, the cost of a product is very high and firms seek to build awareness and develop markets for the product. The quality level of the product is established and patents and trademarks are acquired. If the pricing is high, the company is trying to recover the development costs and will eventually lower the price over time. There is little to no competition and distribution is selective until consumers show that they will accept the product. Promotions are aimed at innovators and groups that will adopt the product early. The marketing strategy is to build awareness and to educate potential consumers of the product's worth and usefulness. Demand has to be created and consumers have to be prompted to sample the product. Companies involved in this stage may try experimental strategies if the product does not obtain enough interest at first. Companies may try to use live demonstrations and tests for the selective consumers that they target early.

The next stage in the product life cycle is the Growth stage. In this stage, companies will try to build preference and increase their market share. Product quality is maintained and costs may be reduced to the scale of the economy. The sales volume should increase greatly, as well as the profitability. The high pricing may be maintained as the company observes an increasing demand while there is still little or no competition. Different distribution paths are added customers begin to accept the product and the demand continues to increase. The company will now involve the consuming public by attempting to make them more aware of the product. When the addition of public awareness is obtained, the avenues for promotion will reach a much broader audience. New players will begin to establish themselves in the market and the competition will begin to increase. Finally, the prices will start to maximize the market share. In this stage, companies will begin to devise complex and strategic advertisements in attempt to grab the consuming public's attention and interest for their product.

After the Growth stage, the product will be well known in the consumer world and the product will develop a certain maturity in the market. This maturity brings about the Maturity stage of the product. In this stage, the cost of the product drops and retains a low figure as the product is well-established in the market and has no need for publicity. Strong growth in sales will diminish and competitors may appear to sprout up out of nowhere with similar products. The primary objective at this stage is to maximize profit while attempting to defend its market share. Product features may be innovated and enhanced to suspend the product from its competitors. Sales volumes will peak and competitive offerings will increase. Prices will sometimes drop due to the proliferation of some competing products and new competitive players that are introduced over time. The distribution of the product may become more intense than ever and certain incentives or contests may be offered to encourage preference over the competition. This stage can be very profitable as companies seek to differentiate their products from their competitors by increasing the abundance of the product in the market. The cleverness and innovation within the creation of certain promotions increases to accentuate product differentiation.

As the product becomes elderly in the market and sales begin to decline, the company must decide how to engage the final stage in the life of a product, the Decline stage. In some situations, sales will not decline as much, but they will begin to stabilize. Costs will become counter-optimal and profitability and profits diminish. Companies must decide the fate of their product by engaging in thought about different outcomes. The company can maintain the product and try their hand at rejuvenating sales and profitability by adding new features or new uses. Sometimes new contests are proposed and prizes are given away in an attempt to obtain more interest from the consumer. The company could decide to harvest the product and stop any new features or contests to keep the identity contained. When harvesting a product, companies can decide to only sell and promote to a certain area or demographic. This process, basically, accepts defeat and continues to get as much profit as possible out of the aging interest and demand for the product. In the worst case scenario, the company can agree to discontinue the product and liquidate the remaining assets or attempting to sell them to another company that may want to try and continue the product. The marketing strategies for this stage will depend solely on the decision to continue, harvest, or discontinue the product.