The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products:
- Introduction
- Growth
- Maturity
- Decline
3. This initial stage require significant
investment
ProductLifeCycleStages.com
4. Challenges of the Introduction Stage
◦ Small or no market: start with low sales
◦ High costs: invest in R&D, marketing and promotion
◦ Losses, Not Profits: negative profits
Benefits of the Introduction Stage
◦ Limited competition: the lack of direct competition
is an advantage
◦ High Price: new product price can be above market
price
ProductLifeCycleStages.com
5. Product Life Cycle Management
◦ All about building the demand and establishing the
market
◦ Emphasis on promotion, production and developing
distribution channel
Photo: flickr/AlainDurand
ProductLifeCycleStages.com
6. The key stage for:
◦ Establishing a product’s position
◦ Increasing sales and
◦ Improving profit margins
Requires:
◦ Development of consumer demand
◦ Reduction of manufacturing costs
ProductLifeCycleStages.com
7. Challenges of the Growth Stage
◦ Increasing Competition: from new manufacturers
◦ Lower Prices: to achieve the desired increase in sales
◦ Different Marketing Approach: to make the most of the
growth potential
Benefits of the Growth Stage
◦ Costs are Reduced: through economies of scale
◦ Greater Consumer Awareness: leads to the sales increase
◦ Increase in Profits: both in overall amount and profit
margin
ProductLifeCycleStages.com
8. Product Life Cycle Management
◦ Typically profits are highest during the Growth
stage
◦ Necessary to reinvest in marketing and promotional
activity
Photo: flickr/Promoview Marketing Promocional
ProductLifeCycleStages.com
9. The primary focus is to maintain market
share
ProductLifeCycleStages.com
10. Challenges of the Maturity Stage
◦ Sales Volumes Peak: the market becomes saturated
◦ Decreasing Market Share: challenge to maintain market
share
◦ Profits Start to Decrease: less market share, less profit
Benefits of the Maturity Stage
◦ Continued Reduction in Costs: economies of scale &
production efficiency
◦ Increased Market Share Through Differentiation:
innovative marketing campaigns or diverse product
features
ProductLifeCycleStages.com
11. Product Life Cycle Management
◦ Innovation will maintain or even
increase market share
Photo: flickr/Vermin Inc
ProductLifeCycleStages.com
12. Demonstrated by the fall in both sales and
profits
Opportunities to continue making profit
ProductLifeCycleStages.com
13. Challenges of the Decline Stage
◦ Market in Decline: difficult to prevent
◦ Falling Sales and Profits: to slow this fall by trying
and increasing market share
◦ Product Withdrawal: before losing money
Benefits of the Decline Stage
◦ Cheaper Production: if able to reduce costs
◦ Cheaper Markets: to look to new, cheaper markets
ProductLifeCycleStages.com
14. Product Life Cycle Management
◦ In the Decline stage, a product can still be viable
◦ Successful manufacturers focus on effective product
life cycle management
Photo: flickr/Michael P. Whelan
ProductLifeCycleStages.com
