What is Product Life Cycles?

807 reads · Last updated: December 5, 2024

The term product life cycle refers to the length of time from when a product is introduced to consumers into the market until it's removed from the shelves. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging. The process of strategizing ways to continuously support and maintain a product is called product life cycle management.

Definition

The product life cycle refers to the duration from a product's introduction to the market until its withdrawal. Management and marketing professionals use this concept to decide when to increase advertising, lower prices, expand into new markets, or redesign packaging. The process of developing strategies to support and maintain a product is known as product life cycle management.

Origin

The concept of the product life cycle originated in the 1950s, introduced by marketing scholars to describe the different stages of a product in the market. Initially, this concept helped businesses understand the market performance of products and develop appropriate marketing strategies.

Categories and Features

The product life cycle is typically divided into four stages: introduction, growth, maturity, and decline. The introduction stage is when the product is first launched, often requiring significant marketing efforts. The growth stage is characterized by rapid sales increase and higher market acceptance. The maturity stage is when sales peak and stabilize, with increased competition. The decline stage is when sales decrease, possibly requiring redesign or market exit.

Case Studies

A typical example is Apple's iPhone. Launched in 2007, the iPhone experienced rapid growth and became a market leader. As the market saturated, the iPhone entered the maturity stage, with Apple extending its life cycle by introducing new models and features. Another example is Kodak film, which entered the decline stage with the rise of digital photography, eventually exiting the market.

Common Issues

Investors often misunderstand the stages of the product life cycle, leading to incorrect market strategies. For instance, over-investing during the maturity stage can result in wasted resources. Additionally, ignoring market trends can cause a product to enter the decline stage prematurely.

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