Introduction

If you are shopping in the mall to buy a new smartphone or are looking at the old music system at home then you are participating and experiencing what is known as the PLC or the product life cycle. When a new product is introduced in the market then it starts its life cycle.

This is where the product starts from being new and of use to the customer and then eventually retiring and going out of circulation from the market. PLC is a continuous process where the product starts from the stage of introduction and then decline and ultimately reaches the retirement stage. In this article, we discuss how a product cycle works, its definition, stages, and some examples of the product life cycle.

In this article let us look at:

  1. What is Product Life Cycle?
  2. Strategies of Product Life Cycle
  3. Examples of Product Life Cycle
  4. Product Life Cycle Concept
  5. Characteristics of Product Life Cycle
  6. Types of Product Life Cycle

1. What is Product Life Cycle?

So what is the leveling of the product life cycle? PLC is a process that the product goes through from the time it was first launched in the market until it eventually declines and gets removed from circulation. The life cycle of a product goes through four stages. These are an introduction, its growth, maturity, and the decline stage. There could be products that stay in the maturity stage for a long time however all the products would eventually phase out from the market. This could happen because of various factors like saturation, an increase in competition, a drop in sales, or a decrease in demand.

Companies make use of the product life cycle analysis to examine the life cycle of the product. This helps in creating strategies to sustain the longevity of the product or its change to meet the demands of the market and that of the developing technology.

2. Strategies of Product Life Cycle

Various pricing models are used by companies when they introduce a new product. This helps in generating sales. The company could go through price skimming where the price of the product is kept high and then lowered as the market demand grows. The company could also apply a price penetration strategy where the initial price is set low to help the product penetrate the market and then increase the price as the demand starts to grow.

The introduction stage is crucial in the life cycle especially in cases when the customers do not take the initial product well. It is also important to focus on packaging and advertising to promote the product. The companies need to evaluate if the product is meeting the needs and the demands of the target market. If the sales go stale then many companies would have to shift their strategy of marketing and would have to market their product in the new demographics to target a new revenue stream.

A PLC analysis lets the company understand when they have to reinvent the product or to pivot the product and take it in a new direction. Companies need to understand where their product is in the product life cycle and then use this information to innovate along with the new technology to diversify their product and to keep up with the present competition and also to elongate the life of the product in the market.

3. Examples of Product Life Cycle

The life cycle of the product starts from the introduction stage and eventually its decline. However, to understand how the cycle will look like, go through the product life cycle examples.

A classic example of the product life cycle is the typewriter. The typewriter was introduced in the 19th century and this is when the technology grew in popularity as it helped to improve the efficiency and ease of writing. However, in the 20th-century typewriters became outdated because of the introduction of laptops and smartphones which caused the demand for typewriters to fall drastically.

Overtaken by computers, typewriters saw the end of sales and thus demand. Now the world is more oriented towards using computers, smartphones, and laptops which in turn is in the maturity phase of the product life cycle.

4. Product Life Cycle Concept

The above example clearly explains the concept of the product life cycle. This is the length of time when a product gets introduced in the market to the consumers until it gets removed from the stores. The life cycle of a product is broadly divided into four phases and companies need to understand the phase to know what should be done to keep up with the competition.

5. Characteristics of Product Life Cycle

The product life cycle is characterized by the stages at which it is in. Each product goes through stages where it starts with a huge demand and an increase in sales. The product then matures and eventually is replaced by bigger and advanced products that ultimately lead to the decline in demand for the product that eventually washes off the sales completely. 

6. Types of Product Life Cycle

The types of PLC are primarily of the following kinds.

  • Development – This is the research phase before the product gets introduced in the market. The company gets in investors and tests how the product will react with the consumers. This stage can last for a long as per the product complexity.
  • Introduction – This is the stage when the product gets introduced in the market. There is awareness created about the product and it reaches out to the potential clients. This is when the sales will be low and the demand will slowly be building up. The companies will mostly be focusing on marketing and advertising the product at this stage.
  • Growth – In the growth stage the consumers have accepted the product and the market are buying in. The company too is investing in various distribution channels.
  • Maturity – In this stage, the sales are leveling up and the company looks to reduce the price so that they still can stay competitive and catch up with the growing competition.
  • Saturation – During this stage, the competitors have taken up a portion of the market and the product in question will neither see a decline nor a growth.
  • Decline – If the product is not the preferred one in the market then you start to see a decline. Consumers have lost interest in the product.

Conclusion

Now that you know the product life cycle definition, it is important to understand that the product life cycle for companies is important to implement new strategies for advertising or work towards reducing the price. They can also take this opportunity to add in some new features or explore new markets. The best companies are those that have their products at various stages in the product life cycle at any point in time.

Interested to learn all about Product Management from the best minds in the industry? Check out our Product Management Course. This 6-month-long program takes place online through live instructor-led sessions. It is the only program in India that offers the ‘Bring Your Own Product (BYOP)’ feature so that learners can build their product idea into a full-blown product, and go through an entire Product Development lifecycle. Not only this, but this is the only program in India with a curriculum that conforms to the 5i Framework. Post completion, learners receive a joint certification from the Indian Institute of Management, Indore, and Jigsaw Academy.

Also, Read

Product Life Cycle Management: Beginner’s Guide in 4 Important Points

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