The product lifecycle is a concept about what stages a product goes through during its circulation in the market. Using this framework helps companies successfully manage their products. The concept is used to make decisions about which resources, specialists, how exactly, and in what quantity to engage depending on the state of the product.
The product lifecycle is usually divided into four stages: market introduction, growth, maturity, and decline.
What Stages of the Product Lifecycle Exist?
| Stage | Description |
|---|---|
| Market Introduction | Includes development and testing stages, as well as first marketing attempts. The product is demonstrated to first clients. Main goal: achieve maximum product recognition in the market. |
| Growth | Begins after the product starts to flourish and grow in the market. First competitors with similar products appear. The most intensive marketing efforts are underway. |
| Maturity | Maximum market size has been reached. Competition is very high; market players work on increasing customer loyalty. Service level, pricing policy, and product differentiation from competitors become important. |
| Decline | Begins with falling sales and declining profitability. Causes are often the appearance of new or replacement products. The iPhone simultaneously opened the smartphone market and "killed" the feature phone market. |
It is worth noting that the product lifecycle concept is also subject to criticism, since in many cases it is quite difficult or even impossible to determine the current stage of a product, and not all products go through the designated cycles.
Why Is It Important to Know About the Product Lifecycle?
The idea that every product goes through life stages appeared back in 1931. In 1965, economist Theodore Levitt published "Exploit the Product Life Cycle," insisting that knowledge of the lifecycle allows companies to timely plan specific actions and decisions to maintain the growth and profitability of their products.
According to him, knowledge of the lifecycle enables a shift to a proactive product policy instead of a reactive one. This is how 3M acted: originally, tape was designed to protect car body parts from paint, but then 3M took steps to expand the potential market — transparent and colored adhesive tapes, dispensers, electronic recording tape, and thermofax were created.
"Understanding the need to extend the life of a product forces a company to act systematically: predict competitors' moves, think about possible changes in consumer reactions to the product and about necessary sales actions that best leverage these conditional events" — Theodore Levitt
What Stage of the Lifecycle Is the Product In Now?
Several modern examples:
- Introduction: iPhone in 2007, which revolutionized mobile phones
- Growth: Instagram, which gathered millions of users in a few years and attracted the attention of major brands and investors
- Maturity: Facebook, which continues to dominate the social media market but faces serious competition and market saturation
- Decline: DVD players, which were displaced by streaming services and more modern technologies
Checklist: How to Determine Your Product's Lifecycle Stage Independently
1. What stage is your product in?
- Small customer base and active marketing efforts → Introduction
- Rapid growth in users and revenue → Growth
- Growth stabilization and increasing competition → Maturity
- Declining revenue and loss of market share → Decline
2. What needs to be done at the growth stage?
- Increase marketing budgets and efforts to capture a larger market segment
- Invest in product improvement to keep it competitive
3. How to keep a product at the maturity stage?
- Maintain customer loyalty through loyalty programs and improved service
- Look for opportunities for innovation and launching new features or products to prevent stagnation
4. How to minimize losses at the decline stage?
- Consider options for product diversification or introduction of new technological solutions
- Plan a phased market exit or transition to serving niche segments
5. When and how to develop a new product?
- The basis for new products can be found in current market needs or user requests
- Analyze successful and unsuccessful aspects of the current product lifecycle to avoid repeating mistakes and use strengths for new developments
The product lifecycle is a complex process that requires careful attention at every stage. Managing the product through all lifecycle stages allows companies to remain competitive, adapt to market changes, and create successful products that satisfy customer needs.
