There are four stages of the product life cycle, and most products follow these phases throughout their lifespan. These are introduction, growth, maturity, and decline.
Each of these life cycle phases are distinctive in how consumers react and respond to a product. As each phase is easily defined, marketing and promotion strategies can be planned well in advance to ensure the product reaches maximum profitability at every point.
Product life cycle marketing aligns a product’s marketing efforts with its life cycle stages. The benefits of using this model includes providing business decision makers with better support, marketing investments can be better optimised, a company has more control over its marketing plan and activities and therefore its results, and it can elongate a product’s lifespan.
In this blog, we’ll explore the four stages of the product life cycle in more detail, and will outline some marketing strategies for each stage.
Marketing during product ideation and development
While some people insist that the development stage is part of the product life cycle, others insist it isn’t. The debate on whether to include it continues, but one thing that’s for sure is that a company should be running marketing campaigns long before a new product or service is launched.
During the research and development phases, there is a ripe opportunity for a company to test and gather data to validate and refine your concept. It’s important to know who your target audience is, and to know that they’re actively interested in the product you want to create and sell. To collect this information, you could run surveys or market research groups to test demand and for feedback on any specific product characteristics the audience is looking for.
To gauge customer interest in a new product, service, or feature, you could also try fake door testing (also known as painted door testing). This method uses a fake door, such as a call to action button or an in-app notification, to announce something which doesn’t yet exist. The landing page on the other side explains the product is still in development (though sometimes it isn’t!) and the company uses the click through rate (CTR) or the number of email addresses collected on the landing page to determine demand.
Another way to drum up audience interest in a new product is to carry out beta testing. The main goal of this activity is to gather feedback on your product to ensure any usability issues are ironed out before the main product launch, but engaging a small and active audience with an early release will also help to create an initial buzz.
Introduction stage: Establishing a customer base and brand awareness
The introduction phase of the product life cycle is when a new product is launched and introduced into the market.
At this point, a product will be relatively unknown as the only people who will have used it are people within the business launching it and beta testers, if the company used any. Due to this, the main goal of any marketing strategy at this stage should be focused on getting the product in front of the right audience and convincing that audience to buy it.
Marketing strategies during the introduction stage should include:
- Establishing a clear brand identity and growing the brand awareness
- Connecting with the right partners or retailers to promote and distribute your product
- Providing samples or trials to key target markets
- Identifying the best product price point.
Price and promotion strategies used to determine the best price point include:
- Rapid skimming: product launched at a high price point and high promotional level
- Slow skimming: product launched at a high price point and low promotional level
- Rapid penetration: product launched at a low price point and high promotional level
- Slow penetration: product launched at a low price point and low promotional level.
Skimming strategies capture the audience who are willing to pay more to be one of the early adopters to have a new product, whereas penetration strategies work best for businesses who are entering a new market or have a relatively small market share available.
During this phase, businesses will be spending a lot more than they’re making in profit. Initial product sales will likely be slow, and marketing will be expensive to grow brand awareness and capture the target audience.
Growth stage: Capitalising on growing demand
The growth phase of the product life cycle is when a product, if successful in the introduction phase, will experience a period of rapid growth, sales volume, and profit. Strategies at this point should capitalise on this product growth, and seek to maximise profits as much as possible.
If profits are low and demand is high, at this point the price point should be raised as much as possible. If new customers have identified any issues with the product in the introduction stage, during this stage there should be efforts on improving the product quality where possible. To increase profits, you could also consider pushing the product out to a wider audience by adopting new distribution channels or entering new territories.
Marketing strategies during the growth stage should include:
- Changing marketing messages from product awareness to product preference – explaining why customers should choose your product over any competitors who may have entered the market
- Adding new product features or services to capture a wider audience or to convince a non-converting audience
- Run surveys for customer feedback and to segment customer data to understand audience demographics and to increase personalisation to ensure brand loyalty.
Maturity stage: When profit peaks
The maturity phase of the product life cycle is when sales peak and flatten out. How long this stage lasts is incredibly variable, and can last years for some products.
More competitors will likely have launched new products, and the market saturation will peak, with many customers having chosen their favourite brands. A company will need to adjust their marketing and promotional activity at this point.
Marketing strategies during the maturity stage should include:
- Highlighting advantages over competitors to convince customers to switch over to you
- Positioning yourself as a market leader by turning your loyal customer base into advocates through incentivised testimonials and reviews on social media or word-of-mouth referrals, and exclusive access to new features or products
- Launching the product into international markets and localising it where necessary
The higher competition may mean companies need lower prices in this stage, to retain their customers and attract the customers of competitors.
Decline stage: Making tough decisions
The decline phase of the product life cycle is identifiable in a significant downturn in the revenue a product generates.
Most products will hit the decline stage eventually, due to technological advances, new trends and innovations, or a change in consumer tastes. During this stage, it’s generally advised to pull marketing spend as profits decrease and spending extra on marketing is a waste of money.
Businesses have a few options when their products hit the decline stage. These include:
- Hanging on and hoping competitors withdraw their versions before you do
- Finding another use for the product and repositioning it with a new market
- Harvesting the product
- Innovating a new and improved version of the existing product and entering a new product life cycle with an already engaged audience.
Learn more about marketing through the product life cycle stages
Become a leader who is an expert in new product differentiation, able to employ the full marketing mix for success at every stage. The University of Lincoln’s 100% online MBA Leadership will equip you with the skills needed to manage teams effectively through all stages of a product including product development, pricing strategies, and constant innovation.
Taught part-time and entirely online, you can fit your studies around your current commitments whilst giving your career progression a boost.