The product lifecycle captures the journey of any product from its launch to its decline, typically divided into 4 stages: Introduction, where awareness is built but the sales numbers are low; Growth, where sales numbers increase rapidly as the product gains penetration & popularity; Maturity, where sales numbers stabilise, possible due to intensified competition; and Decline, where sales numbers drop due to changing consumer preferences or having choices. Understanding this lifecycle helps product managers tailor their marketing strategies and take informed calls about product development, pricing, and potential rationalisation.
1. Introduction
- Characteristics:
- The product is launched into the market.
- Marketing efforts are focused on educating potential customers about the product’s benefits and features.
- Sales are typically low as awareness is still being built.
- Strategies:
- Heavy investment in marketing and promotion to create awareness.
- Target early adopters who are more likely to try new products.
- Pricing strategies may vary: some companies may use penetration pricing to attract customers, while others may use skimming pricing to recover development costs.
- Challenges:
- High costs related to product development and marketing.
- Limited customer feedback as not many have experienced the product yet.
2. Growth
- Characteristics:
- Sales begin to increase rapidly as the product gains acceptance.
- Competitors may start entering the market, leading to more choices for consumers.
- Strategies:
- Focus on increasing market share through advertising and promotions.
- Enhance distribution channels to reach a wider audience.
- Gather and respond to customer feedback to improve the product.
- Challenges:
- Increased competition can lead to price wars and pressure on profit margins.
- Maintaining product quality and customer satisfaction becomes critical.
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