The Moral of the Product Life Cycle is That Companies Must Continually

When I was 12 years old, I used to look through my older cousin's CD collection, a little confused. I didn't understand the need to have CDs when I could go on iTunes and listen to all my favorite songs. To me, CDs were obsolete and iTunes was the wave of the future. Instances like this are great examples of the product life cycle (PLC) in action.

No one wants their product to become "obsolete" and reach the end of its product life cycle. Still, it's important to understand what stage your product is in so you can make better marketing and business decisions. You can mature and grow in the marketplace by agilely responding to changing customer needs, adding new offerings to your lineup, and adopting new tech that keeps you up-to-date in the marketplace.

Below, we'll learn about the product life cycle inside-and-out, but if you're in a pinch, use the links below to jump straight to what you need:

• What is the product life cycle?
• What are the stages of the product life cycle?
• Product Life Cycle Examples
• International Product Life Cycle
• When to Use the Product Life Cycle

What is the product life cycle?

The product life cycle is the succession of stages that a product goes through during its existence, starting from development and ultimately ending in decline. It's typically broken up into six stages. Business owners and marketers use the product life cycle to make important decisions and strategies on advertising budgets, product prices, and packaging.

Now if you're already familiar with the term, you may find this visual a bit off. In the marketing industry, the typical depiction of the product life cycle only has four main stages — Introduction, Growth, Maturity, and Decline. Here at HubSpot, we agree that these are vital for a product, but the two stages "Development" and "Decline" aren't nearly covered enough.

As marketers, it's important to understand how your tactics and strategies change depending on the stage your product is in. Let's break down each of the six stages of the product life cycle. You can also use this template to map out your own product's life cycle phases.

Download the Free Product Life Cycle Template

What are the stages of the product life cycle?

1. Development
2. Introduction
3. Growth
4. Maturity
5. Saturation
6. Decline

1. Development

The development stage of the product life cycle is the research phase before a product is introduced to the marketplace. This is when companies bring in investors, develop prototypes, test product effectiveness, and strategize their launch. Due to the nature of this stage, companies spend a lot of money without bringing in any revenue because the product isn't being sold yet.

This stage can last for a long time, depending on the complexity of the product, how new it is, and the competition. For a completely new product, the development stage is hard because the first pioneer of a product is usually not as successful as later iterations.

Development Stage Marketing Strategy

While marketing typically begins in the introduction stage, you can begin to build "buzz" around your product by securing the endorsement of established voices in the industry. You can also publish early (and favorable) consumer research or testimonials. Your marketing goal during this stage is to build upon your brand awareness and establish yourself as an innovative company.

2. Introduction

The introduction stage is when a product is first launched in the marketplace. This is when marketing teams begin building product awareness and reaching out to potential customers. Typically, when a product is introduced, sales are low and demand builds slowly.

Usually, this phase is focused on advertising and marketing campaigns. Companies work on testing distribution channels and try to educate potential customers about the product.

Introduction Stage Marketing Strategy

This is where the fun begins. Now that the product is launched, you can actually promote the product using inbound marketing and content marketing. Education is highly important in this stage. Your target consumer must know what they're buying before they buy it. If your marketing strategies are successful, the product goes into the next stage — growth.

3. Growth

During the growth stage, consumers have accepted the product in the market and customers are beginning to truly buy in. That means demand and profits are growing, hopefully at a steadily rapid pace.

The growth stage is when the market for the product is expanding and competition begins developing. Potential competitors will see your success and will want in.

Growth Stage Marketing Strategy

During this phase, marketing campaigns often shift from getting customers' buy-in to establishing a brand presence so consumers choose them over developing competitors. Additionally, as companies grow, they'll begin to open new distribution channels and add more features and support services. In your strategy, you'll advertise these as well.

4. Maturity

The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies begin to reduce their prices so they can stay competitive amongst growing competition.

This is the phase where a company begins to become more efficient and learns from the mistakes made in the introduction and growth stages. Marketing campaigns are typically focused on differentiation rather than awareness. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive.

During the maturity stage, products begin to enter the most profitable stage. The cost of production declines while the sales are increasing.

Maturity Stage Marketing Strategy

When your product has become a mature offering, you may feel like you're "sailing by" because sales are steady and the product has been established. But this is where it's critical to establish yourself as a leader and differentiate your brand.

Continuously improve upon the product as adoption grows, and let consumers know in your marketing strategy that the product they love is better than it was before. This will protect you during the next stage — saturation.

5. Saturation

During the product saturation stage, competitors have begun to take a portion of the market and products will experience neither growth nor decline in sales.

Typically, this is the point when most consumers are using a product, but there are many competing companies. At this point, you want your product to become the brand preference so you don't enter the decline stage.

Saturation Stage Marketing Strategy

When the market has become saturated, you'll need to focus on differentiation in features, brand awareness, price, and customer service. Competition is highest at this stage, so it's critical to leave no doubt regarding the superiority of your product.

If innovation at the product-level isn't possible (because the product only needs minor tweaks at this point), then invest in your customer service and use customer testimonials in your marketing.

6. Decline

Unfortunately, if your product doesn't become the preferred brand in a marketplace, you'll typically experience a decline. Sales will decrease during the heightened competition, which is hard to overcome.

Additionally, new trends emerge as time goes on, just like the CD example I mentioned earlier. If a company is at this stage, they'll either discontinue their product, sell their company, or innovate and iterate on their product in some way.

Decline Stage Marketing Strategy

While companies would want to avoid the decline stage, sometimes there's no helping it — especially if the entire market reached a decline, not just your product. In your marketing strategy, you can focus on nostalgia or emphasize the superiority of your solution to successfully get out of this stage.

To extend the product life cycle, successful companies can also implement new advertising strategies, reduce prices, add new features to increase their value proposition, explore new markets, or adjust brand packaging.

The best companies will usually have products at several points in the product life cycle at any given time. Some companies look to other countries to begin the cycle anew.

Now that we've gone through stages, let's review some real-life examples of them in action.

Product Life Cycle Examples

1. The Typewriter
2. Vine
3. Cable TV
4. Floppy Disk

Let's follow the product life cycle of popular products that have since reached the decline stage.

1. The Typewriter

The typewriter was the first mechanical writing tool — a worthy successor to pen and paper. Ultimately, however, other technologies gained traction and replaced it.

• Development: Before the first commercial typewriter was introduced to the market, the overall idea had been developed for centuries, beginning in 1575.
• Introduction: In the late 1800s, the first commercial typewriters were introduced.
• Growth: The typewriter quickly became an indispensable tool for all forms of writing, becoming widely used in offices, businesses, and private homes.
• Maturity: Typewriters were in the maturity phase for nearly 80 years, because this was the preferred product for typing communications up until the 1980s.
• Saturation: During the saturation stage, typewriters began to face fierce competition with computers in the 1990s.
• Decline: Overall, the typewriter couldn't withstand the competition of new emerging technologies and eventually the product was discontinued.

2. Vine

Skipping forward to the 21st century, we see the rise and fall of Vine, a short-form video-sharing app that was the source for many memes at its peak but eventually declined due to other platforms.

• Development: Vine was founded in June 2012 and mainly competed with Instagram.
• Introduction: The app was introduced to the public in 2013. Its differentiating factor was its short-form video format — users had only seven seconds to film something that was hilarious, absurd, or a mixture of both.
• Growth: Only two years after its release, Vine had over 200 million active users. Its popularity led to the advent of the phrase "Do it for the Vine."
• Maturity: Because it was only in the market for a few years, Vine never reached the maturity stage. While adoption was high, it was still a fairly new app.
• Saturation: Vine competed in an already saturated market. Instagram, Snapchat, and YouTube were the preeminent names in its category, and Vine soon started to decline in use.
• Decline: When Musical.ly was introduced, Vine lost a large amount of its user base and shut down. It was succeeded by Byte, a similar short-form video sharing platform, but none of these have been able to surpass Tik Tok, which launched months after Vine's end in 2016.

3. Cable TV

Remember the days of switching TV channels to find what to watch? I do — and they feel distinctly like something of the past. While cable TV is still around, it's safe to say that it's nearing the decline stage.

• Development: Cable TV was developed in the first half of the twentieth century. John Walson has been credited with its invention.
• Introduction: The first commercial television system was introduced in 1950, and by 1962, the technology saw the first hints of growth.
• Growth: After a decades-long freeze on cable TV's development (due to regulatory restrictions), the technology began gaining traction, and by 1980, more than 15 million households had cable.
• Maturity: Cable TV matured around the 1990s. Around seven in ten households had cable.
• Saturation: The start of the 21st century saw an oversaturation of this technology, and it also started to compete with other modern developments such as on-demand services and high-definition TV (HDTV). While the internet was still in its nascent stages, it would soon gain on cable TV as well.
• Decline: From 2015 onwards, cable TV experienced a marked decline. Online video streaming services such as Netflix and Hulu have taken precedence — and this trend is set to continue.

4. Floppy Disk

This relic was once a popular and convenient way to store and share data between computers. I barely understood what they were growing up, and it astounds me to think of the very existence of cloud data sharing and other mass memory storage means.

• Development: The first floppy disk was developed in 1970 by IBM engineers. It was an 8-inch flexible magnetic disk in a square case with 2MB storage capacity.
• Introduction: It was introduced in 1971 and largely became known as the only way to transfer or store data.
• Growth: The floppy disk was majorly used in the 1980s-1990s.
• Maturity: Sold well in the market during the 1990s. Improving with time, it could hold 200MB of storage.
• Saturation: Major competitors emerged at the beginning of the 21st century. The invention of USB cables, external hard disks, CDs and more gave people options to store their data.
• Decline: The floppy disk faced a major decline up to Hewlett-Packard stopping production for the disk in 2009. The storage capacity for other products in the market grew to be more efficient.

Not all products need to face the decline stage. Companies can extend the product life cycle with new iterations and stay afloat as long as they have several products at various points of the product life cycle.

International Product Life Cycle

The international product life cycle (IPL) is the cycle a product goes through in international markets. As products begin to mature and companies want to avoid the decline stage, they'll typically begin to explore new markets globally. When products reach mass production, manufacturing and production shift to other countries as well.

The international product life cycle stages are identical to that of a normal product life cycle. The development stage looks different, however, because local customs and regulations can affect how long it takes to bring the product to a new marketplace.

Beware: once you lay the groundwork in a new marketplace, your competitors will be sure to follow, and the life cycle stages will continue up until saturation and eventually decline. Your option is to either expand into another market or learn from prior mistakes and innovate before the decline stage rolls around.

Next, we'll look at when you should use the product life cycle.

When to Use the Product Life Cycle

For example, a brand new product will be marketed differently than a well-established, mature product. For the former, the marketing campaigns will focus on raising awareness, while for the latter, they'll focus on maintaining awareness.

Businesses also use the product life cycle to achieve the following:

• Establish competitive authority. If your product is new and recently introduced to the market, you can advertise it as a new and improved alternative to an existing product. If the product is established, you can vouch for its long history of use in your branding.
• Decide on a pricing strategy. Depending on the life cycle stage your product is in, you'll choose how to price the product. A new product may be priced lower to entice more buyers, while a product in the growth stage can be priced higher.

• Create a marketing strategy. Your product life cycle stage will determine which strategy to pursue. Maturity and audience knowledgeability play a big role in the type of content you publish on your site and social media profiles.
• Respond before the product begins its decline. There's no worse feeling than watching your product slowly become obsolete or be displaced by a competing product. By keeping the life cycle stages in mind, you can create a strategy that keeps you ahead of the curve as you reach the saturation and decline stages.

The product life cycle benefits businesses because they can shift their wording and positioning to best market the product at the stage it is in. If your product has recently been introduced and you try to market it as a long-established solution, consumers will see right through it and trust you less as a result.

Keep Your Product's Life Cycle in Mind

Whether you're developing a brand new product or working with a mature, well-established brand, you can use the product life cycle stages as a guide for your marketing campaigns. Each stage will dictate how you inform your audience about the product, how you position your brand in the marketplace, and how you decide to move forward after the decline stage. By keeping your product's life cycle in mind, you can invest in better marketing campaigns that result in a higher ROI.

Editor's note: This post was originally published in January 2020 and has been updated for comprehensiveness.

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Source: https://blog.hubspot.com/marketing/product-life-cycle

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