The 6 Levels of the Product Life Cycle [+Examples]

Once I was 12 years outdated, I was confused about my cousin’s CD assortment. Why have CDs after I might go on iTunes and hearken to all my favourite songs? This can be a excellent instance of a product life cycle (PLC) in motion.

Nobody desires their product to develop into “out of date” and attain the top of its product life cycle. That’s why it’s essential to grasp what stage your product is in so you can also make higher advertising and marketing and enterprise choices.

Beneath, we’ll be taught concerning the product life cycle inside and outside. In the event you’re in a pinch, use the hyperlinks beneath to leap straight to what you want:

Within the advertising and marketing trade, the everyday depiction of the product life cycle solely has 4 predominant levels — Introduction, Progress, Maturity, and Decline. At HubSpot, we agree that these are very important for a product, however the two levels “Growth” and “Decline” aren’t practically lined sufficient.

As entrepreneurs, it is essential to grasp how your techniques and methods change relying on the stage your product is in. Let’s break down every of the six levels of the product life cycle.

1. Growth

The event stage of the product life cycle is the analysis section earlier than a product is launched to {the marketplace}. That is when firms usher in buyers, develop prototypes, take a look at product effectiveness, and strategize their launch.

On this stage, firms usually spend some huge cash with out bringing in any income as a result of the product is not being bought but.

This section can final for a very long time, relying on the complexity of the product, how new it’s, and the competitors. For a totally new product, the event stage is especially tough as a result of the primary pioneer of a product isn’t at all times as profitable as later iterations.

Earlier than full-scale manufacturing, the product could also be launched in a restricted market or area for testing functions. This permits firms to evaluate market acceptance, collect consumer suggestions, and make crucial changes earlier than a wider launch.

2. Introduction

The introduction stage occurs when a product is launched within the market. That is when advertising and marketing groups start constructing product consciousness and concentrating on potential prospects. Sometimes, when a product is launched, gross sales are low and demand builds slowly.

On this section, entrepreneurs concentrate on promoting and advertising and marketing campaigns. Additionally they work on testing distribution channels and constructing product and model consciousness.

This stage is essential as a result of firms have the chance to shake up the established order and seize the eye and loyalty of early adopters. The constructive experiences and word-of-mouth suggestions from these early prospects can affect the broader goal market and speed up product adoption.

Some examples of merchandise at present within the introduction stage embody:

In the end, the success of this stage units the muse for the product’s future progress and success in subsequent levels of the product life cycle.

3. Progress

Through the progress stage, customers have accepted the product available in the market and prospects are starting to really purchase in. Meaning demand and income are rising, hopefully at a steadily speedy tempo. This momentum is essential for sustaining enterprise operations, funding additional product growth, and producing returns on funding.

As firms scale, they’ll profit from decrease per-unit manufacturing prices, improved provider relationships, and optimized distribution networks.

Nevertheless, there are some challenges that include the expansion stage. As the marketplace for the product expands, competitors grows. Potential rivals will see your success and can need in.

Some merchandise which might be at present within the progress stage are:

• Smartwatches
• Electrical automobiles
• Peloton

Throughout this stage, it’s essential to maintain attracting new prospects and solidify your model picture so you’ll be able to keep forward of the competitors.

4. Maturity

The maturity stage is when the gross sales start to stage off from the speedy progress interval. At this level, firms start to cut back their costs to allow them to keep aggressive amongst the rising competitors. Streamlining manufacturing processes, negotiating favorable provider contracts, and optimizing distribution networks additionally develop into essential concerns.

That is the section the place an organization begins to develop into extra environment friendly and learns from the errors made within the introduction and progress levels. Advertising campaigns are usually targeted on differentiation relatively than consciousness. Because of this product options is perhaps enhanced, costs is perhaps lowered, and distribution turns into extra intensive.

Through the maturity stage, merchandise start to enter essentially the most worthwhile stage. The price of manufacturing declines whereas the gross sales are rising.

Examples:

• Smartphones
• Amazon
• Online game consoles

5. Saturation

Through the product saturation stage, rivals have begun to take a portion of the market and merchandise will expertise neither progress nor decline in gross sales.

Sometimes, that is the purpose when most customers are utilizing a product, however there are numerous competing firms. At this level, you need your product to develop into the model desire so you do not enter the decline stage. To realize this, you’ll wish to concentrate on offering distinctive service and constructing sturdy relationships along with your prospects.

In a saturated market, innovation additionally turns into important to remain related. Companies should repeatedly put money into analysis and growth to enhance merchandise and provide new options. Failure to take action could result in product obsolescence and lack of market share.

Some examples of merchandise within the saturation stage are:

• Streaming providers
• Breakfast cereals
• Delicate drinks

6. Decline

Sadly, in case your product doesn‘t develop into the popular model in a market, you’ll usually expertise a decline. Gross sales will lower in the course of the heightened competitors, which is difficult to beat.

Decline additionally happens when merchandise develop into outdated or much less related as newer applied sciences enter the market. Shoppers could flip to extra superior choices, rendering the declining product much less fascinating.

If an organization is at this stage, it’s going to both discontinue its product, promote the corporate, or innovate and iterate on its product ultimately.

Listed here are a couple of examples of merchandise within the decline stage:

• CDs and cassette tapes
• Landline telephones
• DVDs

The most effective firms will often have merchandise at a number of factors within the product life cycle at any given time. Some firms look to different nations to start the cycle anew.

Significance of the Product Life Cycle

The product life cycle is essential as a result of it informs a corporation’s administration and decision-makers how nicely a product is performing and what strategic actions it is going to take to succeed. This helps firms allocate sources like employees, budgets, exhibits which merchandise must be prioritized, and the place the corporate ought to innovate subsequent.

Different advantages of utilizing the product life cycle embody:

• Make higher advertising and marketing investments and choices
• Simpler to make long-term plans
• Permits for higher choice making with correct data on efficiency
• Simpler to streamline present processes inside your organization

Product Life Cycle Limitations

Whereas utilizing the PLC methodology definitely helps stakeholders plan, it does have limitations. The cycle breaks down efficiency over a number of levels, however sadly there isn’t a technique to inform how lengthy every stage will final.

Complicating issues additional, not all merchandise will transfer by means of these levels on the identical tempo. For instance, a product could take longer to say no than others. Plus product managers run the danger of not dedicating sufficient effort and sources into a selected product in the event that they suppose the product will decline, creating deliberate obsolescence – even when prospects nonetheless use it.

Breaking Down the Product Life Cycle Concept

Within the late ‘60s, Harvard Enterprise Faculty professor Raymond Vernon developed this advertising and marketing concept in response to an financial mannequin that did not account for traits current in worldwide commerce – that’s why it was initially known as the worldwide product life cycle concept.

It said that merchandise developed in a world market had three phases:

• New product
• Maturing product
• Standardized product

Right here’s a fast breakdown of his concept.

Vernon theorized a brand new product would carry out finest in its nation of origin to maintain manufacturing and manufacturing prices low. As soon as the product gained demand, firms might start exporting to different nations and proceed constructing native manufacturing crops in every new location.

Having these native crops would provide the pliability to make adjustments to the product with out incurring enormous prices.

The standardized section would contain an inflow of rivals, which might lead the corporate to concentrate on driving down manufacturing and manufacturing prices to stay aggressive. Because the market turns into saturated and a brand new product will get launched, the corporate loses its relevance in its residence nation and shifts gears to create one thing new, with the cycle starting once more.

Since then, the product life cycle concept has developed to focus much less on geography and extra on advertising and marketing. Let’s dive into it subsequent.

You need to use this template to map out your individual product’s life cycle phases.

Obtain the Free Product Life Cycle Template

Product Life Cycle Advertising Methods

Now that we’ve mentioned the totally different levels of the product life cycle, let’s discover easy methods to market merchandise in every stage.

Growth Stage Advertising Technique

Whereas advertising and marketing usually begins within the introduction stage, you’ll be able to start to construct “buzz” round your product by securing the endorsement of established voices within the trade.

You may also think about a restricted launch of the product to a choose group of shoppers or in a selected market section. This exclusivity can create a way of anticipation and urgency amongst potential consumers.

Then, you need to use the suggestions from the restricted launch to publish early (and favorable) client analysis or testimonials. Your advertising and marketing aim throughout this stage is to construct upon your model consciousness and set up your self as an progressive firm.

Introduction Stage Advertising Technique

That is the place the enjoyable begins. Now that the product is launched, you’ll be able to truly put it up for sale utilizing inbound advertising and marketing and content material advertising and marketing.

Contemplate collaborating with influencers or trade specialists who’ve a powerful following and affect in your goal market. Encourage them to evaluation and promote your product by means of weblog posts, vlogs, social media posts, or sponsored content material. Their endorsement might help generate credibility and attain a wider viewers.

Schooling is significant on this stage. In case your advertising and marketing methods are profitable, the product goes into the subsequent stage — progress.

Progress Stage Advertising Technique

Throughout this section, advertising and marketing campaigns typically shift from getting prospects’ buy-in to establishing a model presence so customers select them over growing rivals.

A method to do that is by allocating sources to digital advertising and marketing channels like social media promoting, search engine marketing (search engine optimization), content material advertising and marketing, and influencer partnerships. Then, leverage information analytics to focus on and attain your best prospects successfully.

Moreover, as firms develop, they’re going to start to open new distribution channels and add extra options and help providers. Contemplate partnering with retailers, coming into new markets, or exploring e-commerce platforms to succeed in a wider buyer base. In your technique, you’ll promote these as nicely.

Maturity Stage Advertising Technique

When your product has develop into a mature providing, you could really feel such as you’re “crusing by” as a result of gross sales are regular and the product has been established. However that is the place it’s important to ascertain your self as a pacesetter and differentiate your model.

Contemplate sharing invaluable and academic content material, akin to weblog posts and trade insights, to place your model as an authority. Educate potential prospects about the advantages and worth they’ll acquire out of your product.

Constantly enhance upon the product as adoption grows, and let customers know in your advertising and marketing technique that the product they love is best than it was earlier than. This can shield you in the course of the subsequent stage — saturation.

Saturation Stage Advertising Technique

When the market has develop into saturated, you’ll have to concentrate on model consciousness and differentiation.

Establish particular buyer segments inside your market and tailor advertising and marketing efforts to enchantment to their particular wants and preferences. Refine your messaging and positioning to resonate with every section, permitting for a extra focused and environment friendly advertising and marketing strategy.

You’ll additionally wish to concentrate on retaining and strengthening relationships along with your current prospects. Contemplate creating a personalised customer support expertise and introducing new product options, loyalty applications, packaging choices, or bundling with complementary merchandise.

Competitors is highest at this stage, so it’s important to go away little question concerning the prevalence of your product.

If innovation on the product stage isn’t potential (as a result of the product solely wants minor tweaks at this level), then put money into your customer support and use buyer testimonials in your advertising and marketing.

Decline Stage Advertising Technique

Whereas firms would wish to keep away from the decline stage, generally there’s no serving to it — particularly if the complete market reached a decline. In your advertising and marketing technique, you’ll be able to emphasize the prevalence of your answer to efficiently get out of this stage.

To increase the product life cycle, profitable firms may also implement new promoting methods, cut back costs, add new options to extend their worth proposition, discover new markets, or alter model packaging.

Sadly, not each firm is profitable at pivoting their product out of the decline stage. If the product is out of date or financially unviable, it might be finest to plan for an orderly exit from the market.

Now that we’ve gone by means of levels and historical past, let’s evaluation some real-life examples of them in motion.

Let’s comply with the product life cycle of standard merchandise which have since reached the decline stage.

1. The Typewriter

The typewriter was the primary mechanical writing instrument — a worthy successor to pen and paper. In the end, nevertheless, different applied sciences gained traction and changed it.

• Growth: Earlier than the primary business typewriter was launched to the market, the general thought had been developed for hundreds of years, starting in 1575.
• Introduction: Within the late 1800s, the primary business typewriters had been launched.
• Progress: The typewriter shortly turned an indispensable instrument for all types of writing, turning into broadly utilized in workplaces, companies, and personal properties.
• Maturity: Typewriters had been within the maturity section for practically 80 years, as a result of this was the popular product for typing communications up till the Eighties.
• Saturation: Through the saturation stage, typewriters started to face fierce competitors with computer systems within the Nineties.
• Decline: General, the typewriter could not stand up to the competitors of latest rising applied sciences, and finally the product was discontinued.

2. Vine

Skipping ahead to the twenty first century, we see the rise and fall of Vine, a short-form video-sharing app that was the supply for a lot of memes at its peak however finally declined attributable to different platforms.

• Growth: Vine was based in June 2012 and primarily competed with Instagram.
• Introduction: The app was launched to the general public in 2013. Its differentiating issue was its short-form video format — customers had solely seven seconds to movie one thing that was hilarious, absurd, or a mix of each.
• Progress: Solely two years after its launch, Vine had over 200 million lively customers. Its reputation led to the appearance of the phrase “Do it for the Vine.”
• Maturity: As a result of it was solely available in the market for a couple of years, Vine by no means reached the maturity stage. Whereas adoption was excessive, it was nonetheless a reasonably new app.
• Saturation: Vine competed in an already saturated market. Instagram, Snapchat, and YouTube had been the pre-eminent names of their class, and Vine quickly began to say no in use.
• Decline: When Musical.ly was launched, Vine misplaced a considerable amount of its consumer base and shut down. It was succeeded by Byte, the same short-form video-sharing platform, however none of those have been capable of surpass TikTok, which launched months after Vine’s finish in 2016.

3. Cable TV

Keep in mind the times of switching TV channels to seek out what to look at? I do — and so they really feel distinctly like one thing of the previous. Whereas cable TV remains to be round, it’s secure to say that it’s nearing the decline stage.

• Growth: Cable TV was developed within the first half of the 20th century. John Walson has been credited with its invention.
• Introduction: The primary business tv system was launched in 1950, and by 1962, the expertise noticed the primary hints of progress.
• Progress: After a decades-long freeze on cable TV’s growth (attributable to regulatory restrictions), the expertise started gaining traction, and by 1980, greater than 15 million households had cable.
• Maturity: Cable TV matured across the Nineties. Round seven in ten households had cable.
• Saturation: The beginning of the twenty first century noticed an oversaturation of this expertise, and it additionally began to compete with different fashionable developments akin to on-demand providers and high-definition TV (HDTV). Whereas the web was nonetheless in its nascent levels, it could quickly acquire on cable TV as nicely.
• Decline: From 2015 onwards, cable TV skilled a marked decline. On-line video streaming providers akin to Netflix and Hulu have taken priority — and this pattern is ready to proceed.

4. Floppy Disk

This relic was as soon as a well-liked and handy technique to retailer and share information between computer systems. I barely understood what they had been rising up, and it astounds me to think about the very existence of cloud information sharing and different mass reminiscence storage means.

• Growth: The primary floppy disk was developed in 1970 by IBM engineers. It was an 8-inch versatile magnetic disk in a sq. case with 2MB storage capability.
• Introduction: It was launched in 1971 and largely turned generally known as the one technique to switch or retailer information.
• Progress: The floppy disk was majorly used within the Eighties-Nineties.
• Maturity: Offered nicely available in the market in the course of the Nineties. Bettering with time, it might maintain 200MB of storage.
• Saturation: Main rivals emerged at the start of the twenty first century. The invention of USB cables, exterior exhausting disks, and CDs gave individuals choices to retailer their information.
• Decline: The floppy disk confronted a significant decline as much as Hewlett-Packard stopping manufacturing for the disk in 2009. The storage capability for different merchandise available in the market grew to be extra environment friendly. Knowledge storage evolution has grown to the purpose the place floppy disks are easy relics.

Not all merchandise have to face the decline stage. Corporations can prolong the product life cycle with new iterations and keep afloat so long as they’ve a number of merchandise at varied factors of the product life cycle.

Worldwide Product Life Cycle

The worldwide product life cycle (IPL) is the cycle a product goes by means of in worldwide markets. As merchandise start to mature and firms wish to keep away from the decline stage, they’re going to usually start to discover new markets globally.

When merchandise attain mass manufacturing, manufacturing and manufacturing shift to different nations as nicely.

The worldwide product life cycle levels are an identical to that of a standard product life cycle. The event stage appears to be like totally different, nevertheless, as a result of native customs and laws can have an effect on how lengthy it takes to carry the product to a brand new market.

Nevertheless, when you lay the groundwork in a brand new market, your rivals will be sure you comply with, and the life cycle levels will proceed up till saturation and finally decline. Your choice is to both develop into one other market or be taught from prior errors and innovate earlier than the decline stage rolls round.

Subsequent, we’ll have a look at when it is best to use the product life cycle.

When to Use the Product Life Cycle

Companies use the product life cycle to realize the next:

• Set up aggressive authority. In case your product is new and not too long ago launched to the market, you’ll be able to promote it as a brand new and improved different to an current product. If the product is established, you’ll be able to vouch for its lengthy historical past of use in your branding.
• Determine on a pricing technique. Relying on the life cycle stage your product is in, you’ll select easy methods to value the product. A brand new product could also be priced decrease to entice extra consumers, whereas a product within the progress stage may be priced larger.
• Create a advertising and marketing technique. Your product life cycle stage will decide which technique to pursue. Maturity and viewers knowledgeability play an enormous position in the kind of content material you publish in your website and social media profiles.
• Reply earlier than the product begins its decline. There’s no worse feeling than watching your product slowly develop into out of date or be displaced by a competing product. By preserving the life cycle levels in thoughts, you’ll be able to create a technique that retains you forward of the curve as you attain the saturation and decline levels.

The product life cycle advantages companies as a result of they’ll shift their wording and positioning to finest market the product on the stage it’s in. In case your product has not too long ago been launched and also you attempt to promote it as a long-established answer, customers will see proper by means of it and belief you much less consequently.

Preserve Your Product’s Life Cycle in Thoughts

Whether or not you are growing a model new product or working with a mature, well-established model, you need to use the product life cycle levels as a information on your advertising and marketing campaigns.

Every stage will dictate the way you inform your viewers concerning the product, the way you place your model within the market, and the way you determine to maneuver ahead after the decline stage.

By preserving your product’s life cycle in thoughts, you’ll be able to put money into higher advertising and marketing campaigns that lead to a better ROI.

Editor’s word: This put up was initially printed in January 2020 and has been up to date for comprehensiveness.

This text was written by a human, however our group makes use of AI in our editorial course of. Take a look at our full disclosure to be taught extra about how we use AI.