What is product life cycle model?
Product marketing managers face numerous challenges when introducing a new product to the market. These challenges vary by the size of the new product, the maturity of the market, and the company’s overall marketing activities.
As a result of these disparities, new product introductions differ across companies and industries. The introduction of new products is often referred to as “marketing,” “promotion,” or “launch.”
The introduction of new products can take many forms, but competition for the consumer’s interest is often fierce. With this in mind, any new product introduction strategy should be prepared in advance to maximize the chances of success.
Since there are a variety of strategies for introducing new products into the market, marketing managers might use a strategy that capitalizes on market trends to improve their chances of success better.
In this article, we will discuss the product lifecycle model and how this model can help marketers in their new product introduction stage prepare their marketing campaigns better.
What is The Product Life Cycle Model?
Product life cycle Model is defined as “the length of time from a product first introduced to consumers until it is removed from the market.” The model helps marketers grasp their target market by identifying the potential needs of customers. It is also used to plan, measure and monitor a company’s marketing activities across all stages.
The product life cycle model has played an essential role in how marketers approach new products, and it has also been used for marketing analysis and forecasting. This can be done by tracking changes in sales data over time or by looking at sales performance across competitors.
It is a vital tool for product managers, who rely on it during the product development and promotion stages to measure their progress and make decisions.
Although the product lifecycle model is not a new concept, it has received considerable attention due to the proliferation of data and the internet. The entire marketing world has become a networked one, enabling companies to utilize the data available on their competitors to pierce through the competition. This is also referred to as competitive intelligence.
Do you want to leverage the product life cycle model and increase your sales?
Contact Growth Hackers
What Are The Stages of The Product Life Cycle?
The product life cycle involves four stages. Within each stage, some activities occur. These stages are:
Introduction.
In this stage, a new product is introduced or repositioned. The goal is to gain market share by establishing a brand name. Typically, this stage lasts for around 2–3 years. A new product’s introduction is based on the product development process. This involves studying the problem and finding a solution. With this problem in mind, a new product is created to help solve that problem.
During the introduction stage, distinct stages show different marketing tactics being used. These strategies show that marketers have made strategies and budget allocation, as A/B testing is one of the most common techniques to increase awareness of the product.
Growth.
The growth stage occurs after the product reaches a niche in the market. This is because a wider group of people is then using the product, and it helps them connect. During this phase, marketers focus on keeping the product relevant for an extended period.
The growth phase is an important stage of any product as it shows the beginning of the product being used by many people. Different marketing strategies, Branding, Pricing, etc., are also used during this sales growth phase. Plus, the sales volume or the sales growth of the product during this phase shows how successful the product is in finding buyers.
Maturity.
After the product has reached market saturation, it enters the maturity stage. It is important to note that the product’s relevance has long passed at this point. This means that it is now priced to sell and is not useful to anyone anymore. Its market situation will be more like a commodity item than a product.
During the maturity phase, competition is strong as at least 3 or 4 existing competitors in this phase. A marketing strategy splits into a profit-promoting measure such as advertising, price competition, and even product differentiation. Other strategies include retaining the current market share by offering value-added services and enhancing service quality.
Decline.
After a product has entered the decline stage, it will have a shorter life and be replaced by a new product. This is when the product dies or becomes more popular due to new features being added.
Once again, marketing strategies such as branding, pricing, etc., are used to help sell the product now that it is more popular than ever. The goal of decline is to keep the product alive as long as possible so that both the consumers and marketers have a chance at earning from the product rather than its product supplier have to.
After the product has declined for a while and it has become more popular, it enters its final stage called spectacular failure. As a result, the product or service fails altogether and is no longer used.
What The Product Life Cycle Model Helps Marketers Realize
Now, let’s take a look at how a Product Life Cycle Model helps marketers:
Reduced time to market.
Product marketers face a myriad of problems such as time to market, time to competitive research and development, and mass production. Applying the Product Life Cycle Model reduces these problems and can be solved almost instantly. In addition, each phase is shown in a timeline format which helps producers understand the relationships between the phases and the progress in each phase.
Reduced Risk.
The Product Life Cycle model suggests that it is a meaningful concept because it helps know whether the product will be successful or unsuccessful. When companies advance into single brand production, they must adapt to market demands to ensure the success of their products.
As a product enters the decline phase of its life cycle, it is too late to adapt and compete effectively. However, when companies look at the product’s life cycle model, they can see that if they anticipate this decline and prevent it from happening, they will be able to maintain their competitive edge as long as possible in the market.
Reduced uncertainty.
The product’s value is likely to be stable throughout its life cycle. This will help companies adopt a rational approach to their development to identify the trends in the market and develop products that can keep up with them.
It is possible to improve the development cycle by creating the Product Life Cycle Model. This will help companies adapt their production process and produce more efficient, simple, and effective products with a longer life cycle.
Reduced cost of brand extension/product improvement.
Companies currently selling a product in the market with a short life cycle will have to develop a new product. The more that a company has to develop a new product, the more they will have to resort to innovation which will cost them money and time.
However, suppose a company has been able to anticipate and implement the principle of life cycle management. In that case, they will be able to develop a new product for less investment by using the same materials and machinery that have already been used for the development of the existing products.
Now is the time to market your products with the use of the product life cycle model.
Work with Growth Hackers
Higher return on investment from promotional campaigns.
Although this is subjective, it depends on how effective promotional campaigns are. Suppose a company only has to spend a minimal amount of money on advertising for the product for many years. In that case, the amount of money that it will make over the product’s lifetime is likely to be much greater than if they do not have to spend anything at all.
In addition, people are likely to notice or remember advertisements more than they would in decline. At the same time, sales are still strong since such marketing efforts will help protect brand equity and increase brand awareness, which may lead to increased sales.
Reduction in long-term total cost; marketing investment reduction; and price discount.
Since the company has decided to start declining early, they get to reserve money for future product improvements, thus leading to lower total cost (i.e., the purchase of a new product reflecting improved performance installed in place of an old product).
Since marketers can invest more time developing and perfecting various products, they can recover even more of their original costs while incurring fewer additional costs by raising prices.
The combined effects of reduced sales and reduced expenses lead to a downward adjustment in prices since the company is no longer losing money on product sales.
Extend the lifetime of your product or brand.
The lifecycle methodology can be creatively used to extend the product life and increase the size of the market for a newly developed product. For example, this can be accomplished by using cost-cutting methods to make an old model more successful (leaving more time for research and development).
To have a newer, improved version available at the same price. This can be an excellent way to reduce product development costs since it can keep the profits from declining sales and reduce future expenditures on R&D by some amount.
Final Words on How Product Life Cycle Model Helps Marketers
At last, we would say that Product Life Cycle Model or ProdeXology helps you develop your products and services, which will be able to target the markets, compete with other products, and sell your product or service. Also, it will help you in building new strategies for marketing.
If a company wants to understand its target customers, their key competitors, and how their product will compete with them, then this company can use some of the models mentioned above.
To sum up all the above aspects, the product life cycle concept is a practical way of looking at marketing. It provides insights that can be used to decide what (and how much) marketing is being done at any given time.
Growth Hackers is one of the leading product marketing companies helping businesses from all over the world grow. There is no fluff with Growth Hackers. We help entrepreneurs and business owners leverage product life cycle model, generate qualified leads, optimize their conversion rate, gather and analyze data analytics, acquire and retain users and increase sales. We go further than brand awareness and exposure. We make sure that the strategies we implement move the needle so your business grow, strive and succeed. If you too want your business to reach new heights, contact Growth Hackers today so we can discuss about your brand and create a custom growth plan for you. You’re just one click away to skyrocket your business.
