Life Cycle Management

Everyone goes through various phases in their respective lives. Similarly, a product launched in the market undergoes various phases of analysis, growth, maturity and declination. This is known as the product life cycle theory. To understand the revenue generated by a product, it is important to study the development stages of the product.

Defining the development phase - The development stage of a product is the phase of the product just before introducing it to the market. A lot of research work is done by a panel of experts on product identity, the need for its introduction in the market, the products benefits and the method of producing it. They also study the products introduction to the market and what can be done to maximize the prospective profits. The sole idea is to introduce the most beneficial product in the market.

After the product progresses towards the market, different strategies related to the marketing mix come in to existence. These strategies focus on product, price, distribution and promotion issues of the market. A clear analysis of how the product should appear in the market, what should be the introductory price and in which market the product should be distributed is done.

The Product Life Cycle Theory considers the following stages of a product's life cycle: * Introduction Stage.

* Growth Stage.

* Maturity Stage.

* Decline Stage.

All the stages under this model strictly evaluate the product according to the four marketing mix strategies.

In the Introduction stage, the product is introduced to the market. The product is assigned a brand name and is introduced at a slightly lower price in order to gain a foothold in the market.

The Product is distributed only to those markets where the demand is higher. Various ways to promote the product in the market are explored, so that product awareness is created.

During the Growth stage, the sales of the product are at a much higher level. In cases where the demand is high, the price can be increased temporarily. More distributions are made in order to capture a larger share of the market. More and more promotions take place in order to attract more customers for the product.

During the Maturity stage, the profits earned from the product rise. The advertising costs can be reduced at this point and steps are taken to enhance the product so as to withstand the competition in the market.

In the Decline stage, the product starts loosing its potential in the market due to tougher competition. At this stage, the cost of the product is usually reduced.

A product lifecycle theory helps an organization to study the market strategies with respect to the product they are launching in the market. These strategies help them to establish and sustain their products in the market which results in the maximization of profits.

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