Meaning of Product Life Cycle
Just like people, even products have life cycles. A product life cycle consists of four stages: introduction, growth, maturity, and decline. The concept is applied by management and marketing professionals as a deciding element to know when to increase advertising, cut down prices, expand to new markets, or redesign packaging.
Product life cycle management is the process of strategising ways to support and maintain a product continuously. Hence, the theory of product life cycle aids in informing the business regarding decision-making, ranging from pricing and publicity to expansion or cost-cutting.
Understanding the Product Life Cycle
A product is a result of an idea set within the limits of modern business. It is not likely to be further proceeded with until research and development are complete and found feasible as well as potentially profitable. At that stage, the product is manufactured, marketed, and rolled out.
The product introduction phase usually includes a significant investment in advertising and a marketing campaign centred around creating consumer awareness about the product and its benefits. A successful product will move onto the growth phase. As the demand grows, the production of the product is increased, and its availability expands.
As a product matures to its most profitable stage, the costs of producing and marketing will decline. However, it necessarily begins to take on the increased competition while other companies compete for its success; sometimes, with improvements or lower prices. The product will begin its decline and lose its market share.
Examples of Product Life Cycle
VCR Most of the people of Gen X would have grown up watching or using VCRs. But, these are stuff you would hardly find in anyone's home these days.
With the increase in streaming services like Netflix and Amazon, VCRs have effectively been phased out and are in their decline stage.
Once an innovative invention, VCRs are currently in very low demand and are certainly not bringing in the sales they once did.
Electric Vehicles The rise of electric vehicles represents the growth stage of the product life cycle. Companies such as Tesla have been capitalising on the growing product for some years now. However, recent challenges may indicate changes for a particular company.
Yet, while the electric car is not necessarily new, the innovations that companies like Tesla have come up with in recent years are persistently adjusting to new changes in the electric car market. It signals a growth phase.
