Life Cycle Management

Define Product Life Cycle

The Defining Stages Of The Product Life Cycle

Define Product Life Cycle

A new product goes through four stages of life cycle in the market. These are the introduction stage, growth stage, maturity stage and decline stage. The sequencing of various stages of a new product in the market is known as the product life cycle. Each stage of a product defines its position, marketing strategy and the marketing mix used in the market.

Definition: The Stages of the Product Life Cycle

Define Product Life Cycle

Introduction Stage The primary concern of the firm during this stage is to look for measures that can generate awareness of the new product in the market. This includes the following aspects:

*Branding for the product is established. If the product is associated with an existing brand then it becomes easier to gain access into the market. Branding also considers trademark and copy right issues.

* Market distribution takes place through existing channels or new selected introduction channels. Because the production has not yet reached economy of scale, selective distribution is engaged.

* Promotional strategies center on generating product awareness.

Growth Stage This is the second stage of a product. It includes following aspects:

* A firm uses differentiation to position its product. This may include superior features to win consumer loyalty and build market share.

* The firm may improve the quality of the product by adding some new features or services to the current product whilst maintaining price.

* The Price of the product is also reviewed after looking at the demand of the product.

* As the demand for the product is identified, distribution channels are expanded to supply the growth of the market.

* The firm also uses a greater mix of marketing channels to gain exposure.

Maturity Stage At this stage the growth of the product in the market begins to peak. This might be due to other similar and established products in the market which leads to competition and market saturation. Firms now need to defend market share while maximizing profits. New initiatives are developed in response to this stage:

*Firms work strictly to enhance the features of the product so as to compete with the other products.

* Product Cost cutting can take place.

* Distribution and promotions channels are intensified so that the product meets more customers and retains shelf space.

Decline Stage The last stage in the product life cycle is the decline stage. A firm can take following steps to keep the product in the market:

* The firm can try to enhance the features of the product.

* It can reduce the cost or continue to differentiate to create perceived value.

* The firm can decide to sell the product to another firm who is willing to continue the product in the market. This typically happens if the firm decides to exit the market.

The product life cycle is defined by its various stages. The stages vary in length according to the nature of the industry and in response to market and technological pressures.

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