The concept talks about the most important phases a product passes through from the time it was initially developed till the time it eventually is slowly removed from the market.
The Concept of Product Life Cycle
The concept of the product life cycle was developed in the year 1966 by Raymond Vernon, whose fundamental purpose was in fact to demonstrate the changes in field encountered by various countries around the world over period.
On a broader scale, the product lifecycle can be applied to all products, beyond the concept of comparative advantage observed in the context of global marketing industry.
A product is just like a human being. It is brought into this world, grows up fast, matures and then conclusively passes away.
The product life cycle concept allows you to have an understanding of the changes in field faced by international locations that have preferred to eMphasis on the production of one or even more characteristic products.
The product life cycle is a crucial consideration when it comes to marketing.
The concept talks about the most important phases a product passes through from the time it was initially developed till the time it eventually is slowly removed from the market.
Don’t assume that all products arrive at this very final phase. A number of them continue to grow and maintain the market share, yet others rise and then tumble.
A product is just like a human being. It is brought into this world, grows up fast, matures and then conclusively passes away.
Then again, the fundamental difference in scenario connected with human beings and products could be described as that a product has to be destroyed by a player. In some cases the organization (to create more advantageous products) or by competitors (an excessive amount of external levels of competition).
There are a number of products available in the market which have existed since many years (i.e Lamps, Tubelights), whereas there are actually other types that have been rapidly taken off the shelf (i.e DVDs).
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What are the primary phases of the product life cycle?
A product passes through four primary life stages that define its cycle:
Introduction stage – researching or exploring, developing or building and subsequently introducing the product.
Qualities of Introductory stages of Product life cycle
- Larger investment capital, smaller earnings
- Manageable Levels of competition
- Organization endeavors to promote acceptance and build initial distribution
- Organization requires marketing promotions focused in the direction of customers and prospects to be able to elevate awareness and need for product
Growth stage– in cases where product sales are rising at their most convenient rate.
Qualities of Growth stages of Product life cycle
- Product is thoroughly established
- Demand from customers increase
- Distribution channels are increased
- Competitiveness raises
- Organization might add extra solutions or even support services.
- A method of promotion targets a larger target Audience
- Greater sales revenue generation
Maturity stage– product sales tend to be in close proximity to their maximum potential; however the rate of growth is going slower as a consequence of new competitors in market or saturation.
Qualities of Maturity stages of Product life cycle
- Level of competition is higher than average
- Product is well established and as a consequence promotion expenditures are significantly less
- Minimal growth potential for the product
- Pricing may be lower a result of the new competition, therefore profits margins become significantly less appealing
- Promotion draws attentions to product differentiation
- The most important focus is in the direction of extending the life cycle and sustaining market share
Decline stage – very last phase of the cycle, in cases where product sales start to tumble.
Qualities of Decline stages of Product life cycle
- Market is saturated
- Sales as well as revenue decline
- Organization evolves into cost sensitive
- Great deals of resources are blocked in reviving the lifeless product.
- At this time there tend to be barely three effective choices left with the organization
- Repositioning or Rebranding the product to lengthen product life cycle
- Maintain the product quality and cut down the additional costs to receive highest possible earnings till the time the product can generate product sales as well as profits.
- Bring to close the product, liquidating leftover stock or selling it to another company that is prepared to continue the product
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