Product lifecycle management strategies refer to companies’ various tactics and approaches to managing their products as they move through different product life cycle stages. The product life cycle consists of four main stages: introduction, growth, maturity, and decline.
- Introduction Stage: Companies create awareness and generate interest in their new product during this stage. Strategies in this stage include heavy advertising and promotion, building distribution channels, offering free samples, and pricing strategies such as penetration pricing.
- Growth Stage: In this stage, sales and revenue start to increase, and companies focus on building brand loyalty and market share. Strategies in this stage include product improvements and new features, expanding distribution channels, pricing strategies such as skimming or maintaining prices, and building customer relationships.
- Maturity Stage: In this stage, sales growth begins to slow down, and the market becomes saturated with competitors. Strategies in this stage include extending the product life cycle through product improvements or new product lines, pricing strategies such as discounts or bundling, and building customer loyalty and retention.
- Decline Stage: In this stage, sales begin to decline, and the product becomes obsolete. Strategies in this stage include focusing on cost reduction and maximizing profits, discontinuing the product, or finding new uses for the product in different markets.
Overall, the key to successful product life cycle management is to constantly evaluate the product’s performance, adapt to changes in the market, and implement appropriate strategies at each stage of the product’s life cycle.
How to manage the product life cycle
Product life cycle management involves managing a product from its initial conception to its eventual retirement from the market. Here are some strategies that can help you manage the product life cycle effectively:
- Product development: In the introduction stage, it’s essential to focus on developing a high-quality product that meets the needs of your target market. You should gather customer feedback and make necessary improvements to the product based on their feedback.
- Marketing: During the growth stage, focusing on marketing the product to a broader audience is crucial. It would help to reach a wider audience by considering different marketing strategies, such as advertising, public relations, social media, and influencer marketing.
- Price and promotion: In the maturity stage, you must focus on maintaining market share and profit margins. This can be done by adjusting the product’s price and promotional strategies to remain competitive.
- Sales and distribution: During the decline stage, focusing on reducing costs and optimizing sales and distribution channels is important. This may involve streamlining operations, reducing product variations, and optimizing distribution channels to reduce costs.
- Product retirement: When a product reaches the end of its life cycle, it’s important to plan for its retirement. This may involve discontinuing the product, selling the remaining inventory, or finding new uses.
By focusing on these strategies, you can manage your product life cycle effectively and ensure that your product remains competitive and profitable throughout its life cycle.
Product lifecycle management strategies with examples
Introduction stage:
a. When Apple launched its first iPhone, it used a heavy advertising campaign to create awareness and build demand for the product. They also offered free samples to some potential customers to encourage them to try the product.
b. When Tesla launched its first electric car, it focused on a limited geographic area (California) to test its potential and gather early adopters’ feedback.
Growth stage:
a. When Netflix started gaining traction in the streaming market, it added new features like personalized recommendations and original content to appeal to a broader audience.
b. When GoPro became popular with adventure enthusiasts, it added new product variations like the Hero4 Session and Hero5 Black to appeal to a broader customer base.
Maturity stage:
a. Coca-Cola, a mature product, stays competitive by focusing on product differentiation through new packaging designs, marketing campaigns, and limited-edition flavors.
b. McDonald’s, another mature product, focuses on expanding its global reach by opening new locations in different countries.
Decline stage:
a. Kodak, a once-popular camera brand, tried to maintain sales by identifying and focusing on niche markets like photo printing and digital cameras. However, they eventually discontinued their camera business and pivoted to other products.
b. Blockbuster, a video rental chain, tried to maintain sales by reducing costs and focusing on niche markets like video game rentals. However, they eventually went bankrupt due to competition from streaming services like Netflix.
Product lifecycle marketing strategies
The product lifecycle (PLC) is a concept that describes the various stages a product goes through, from its introduction to the market until its eventual decline. The stages of the PLC include an introduction, growth, maturity, and decline. Each stage requires different marketing strategies to maximize the product’s success. Below are some marketing strategies for each stage of the product life cycle:
Introduction Stage: This is the stage where a new product is introduced to the market. The focus of marketing during this stage should be on creating awareness and generating demand for the product. Some marketing strategies for the introduction stage include:
- Offering free samples or trials to potential customers
- Creating a buzz around the product through social media, PR, and influencer marketing
- Offering special introductory pricing or promotions to encourage trial and adoption
- Conducting market research to identify and target the most receptive consumer groups
Growth Stage: The product gains broader acceptance in this stage, and sales increase rapidly. The focus of marketing during this stage should be on building brand loyalty and maximizing market share. Some marketing strategies for the growth stage include:
- Increasing advertising and promotional activities to maintain and grow sales
- Expanding distribution channels to reach new customers and markets
- Introducing new product variations or upgrades to keep up with evolving consumer needs and preferences
- Improving customer service and support to build customer loyalty
Maturity Stage: This is where the product has reached its peak in terms of sales and market penetration. The focus of marketing during this stage should be on maximizing profits and defending market share against competitors. Some marketing strategies for the maturity stage include:
- Differentiating the product from competitors through branding, packaging, or positioning
- Reducing costs and increasing efficiencies to maintain profitability
- Offering incentives to retailers to maintain shelf space and visibility
- Creating new uses or applications for the product to extend its lifecycle
Decline Stage: This is where sales begin to decline as the product becomes outdated or faces increased competition. The focus of marketing during this stage should be on managing the product’s decline and minimizing losses. Some marketing strategies for the decline stage include:
- Refrain from unprofitable product variations or lines.
- Cut costs to maintain profitability or divest the product if necessary.
- Focus on loyal customers and niche markets that may still demand the product.
- Transition to a new product or introducing a product replacement to replace the declining product.
In summary, understanding the different stages of the product life cycle and tailoring marketing strategies to each stage is essential for maximizing a product’s success and profitability.
Product life cycle extension strategies
Product life cycle extension strategies are used by businesses to prolong the life of a product beyond its expected life cycle. Here are some common strategies:
- Product Improvement: Improving the product by adding new features or making it more advanced can help to extend the product life cycle. This can increase sales and maintain customer interest.
- Market Expansion: Expanding the product into new markets can help to extend the life cycle. This can be done by entering new geographic regions or targeting new customer segments.
- Product Diversification: Diversifying the product range by adding new products can help to extend the life cycle. This can be done by adding complementary products or expanding the product range to include new product categories.
- Price Reduction: Lowering the product’s price can help extend the life cycle by making it more affordable and accessible to a broader range of customers.
- Promotions: Increasing marketing and promotional activities can increase product awareness and generate renewed interest.
- Repackaging: Repackaging the product with new branding or packaging can help refresh the product and appeal to new customers.
- Licensing: Licensing the product to other companies can help to extend its life cycle by allowing it to be sold in new markets or under different brands.
Businesses can extend a product’s life and maximize its profitability by using one or more of these strategies.
