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What Is a Product Life Cycle?
A product life cycle is the period of time from a product’s introduction into the marketplace through its removal from the market. A standard product life cycle involves four key stages: the introduction stage, the growth stage, the maturity stage, and the decline stage.
The Importance of Tracking Product Life Cycle
A company's leadership must understand all stages of the product life cycle in order to support a product throughout its existence. While the introduction phase may hinge mostly on product awareness, the growth phase may focus far more on actual product sales volume. In turn, the maturity phase may involve fending off new competitors while the decline phase may be about making the most of a few more years of the product's lifespan. Executives skilled in product lifecycle management respect the differences between these phases and adjust their business strategies accordingly.
4 Stages of the Product Life Cycle
A product passes through four stages of the product life cycle.
- Introduction stage: In this stage of the product life cycle, the product debuts. Whether the product launch is a global release or focused on a few new markets, considerable new product development costs go toward marketing campaigns to build brand awareness. Typically, a company develops its marketing strategy concurrently with the internal product development stage. This way, when the product is officially ready for public consumption, marketing efforts are already well underway.
- Growth stage: In the growth stage, the company attempts to seize greater market share for the product. Companies going through the growth stage must experiment with pricing to find the sweet spot that enables differentiation from the competition. Production ramps up, and sales representatives seek new distribution channels to get the product in the hands of consumers.
- Maturity stage: In the maturity stage, the product has reached the peak of its market share and profitability. To keep the product desirable to new audiences, a company might add new features or suggest new uses for the product.
- Decline stage: When advanced marketing and new product features cannot provide any further growth, the product enters its decline stage. Decline stages can take a matter of months, or they can span decades. Product decline occurs when customer brand preference shifts, when products become obsolete, and when professional reputations change. In some cases, changing demographics cause a product to fall out of fashion. Decline ends with a product being pulled from the shelves.