sara MARKETS > COMMODITIES
UPDATED: UN 15, 2021257 PM EDT -ORIGMAL: MAR 42018
What Is the Product Life Cycle? Stages and Examples
The product life cycle is the course of the life of a product from when the
product is in development to after it has been removed from the market.
ANNE SRADERS
Whether you%e looking through your parents old VHS tapes or shopping for anew smartphone,
youre participating in ang experiencing etferent stages of the product Ife cyte, or PLC,
When a product enters the market, often unbeknownst to the consumer, thas alife cycle that
caries it from being new and useful to eventually being retired out of circulation inthe market. This
process happens continually -taking product from ther beginning inoduetion stages all the way
Urough their decline and eventual retirement.
What Is the Product Life Cycle?
ps nwtatolcerinutliconedteepetil ied 468254 ‘ehate te Preeti Ce Stage na xan TraSae
The product ife cycle is the process a produet goes through fram when ti fis intcoduced into the
‘market unl t declines or le removed from the market. The lifecycle hae fou stages -invoduetion,
growth, matuy and decline.
While some products may stay in @ prolonged maturity state, all products eventually phase out of
the matket due to several factors including saturation increased competition, decreased demand
and dropping sales.
Adstionally, companies use PLC analels (examining thelr products Ife cycle) to create strategies
to sustain their product's longevity or change it to meet with market éemand or developing
technologies
4 Stages of the Product Life Cycle
General there are four stages tothe product Ife cyole, fom the product's development tts
decline in value and eventual retirement frm the markt
1. Introduction
Conce a pracuet has been developed, the fist stage i it introduction stage n this stage, the
products being released into the market. When a new product is released, tis often ahigh-stakes
time inthe products lf cycle although it does not necessarily make or break the product's
eventual success,
ring the introduction stage, marketing and promotion areata high -and the company often
invests the most in promoting the product ana getting it int the hands of consumers. This is
perhaps best showcased in Apple's (AAPL) - Get Apole nc. (AAPL) Report famous launch
presentations, whicn highlight the new features oftheir newly (or soon to be relessed) products,
Item this stage thatthe company is fist abe to get a sense of how consumers respond tothe
produc, f they lke it and how successful It may be. However, tis also often aheavy-spending
petiod forthe company with no guarantee that the product wil pay fr itself trough sales,
ps nwtatolcerinutliconedteepetil ied 468254 28hate te Pree Le Ce Stages na xa Trae
Costs are generally very high and there is typically ttle competition. The principle goals ofthe
Introduction stage are to bulld demand fo the product and gett into the hands of consumers,
hoping t later cash in on its growing popularity.
2. Growth
By the growth stage, consumers are already taking tothe product and increasingly buying It The
product concept is proven and is becoming more popular - and sales ae inreasing,
Other companies become aware ofthe product and its space inthe marke, which is beginning to
raw attention and increasingly pullin revenue. If competition forthe products especially high the
‘company may sil heavily invest in advertising and promotion of the product to beat out
competitors. As result of the product growing, the market itself tends to expanc. The product in
the growth stage is typically tweaked to improve functions and features,
‘As the market expands, mose competition often drives prices dawn to-make the specific products
competitive. However sales ae usvaly increasing in volume and generating revenue. Marketing in
this stages almed at increasing the products market shar.
3. Maturity
When a product reaches matuiy its sales tend to slow or even stop signaling a largely saturated
market. this point, sales can even start to crop. Prcing at this stage can tend to get compete,
signaling margin shinking as prices begin faling due to the weight of outede pressures like
competition or lower demand. Marketing a this point is targeted at fending off competition, and
companies will often develop new or altered products to reach different market segments
Given the highy saturated marke, tis ypiclly inthe maturty stage ofa product that less
successful competitors are pusned out of competition often called the 'shake-out point”
In this stage, saturation is reached and sales volume is maxed out. Companies often begin
Innovating to maintain or increase the market share, changing or developing thei product to meet
with new demographics or developing technologies.
ps nwtatolcerinutliconedteepetil ied 468254 sesara