The product life cycle (PLC) is a concept that describes the different stages a product goes through from its introduction to the market to its eventual decline.
Understanding the life cycle is important for businesses as it can inform their marketing, pricing, and development strategies. In this article, we will discuss the five stages of the product life cycle in detail.
The introduction stage is the first stage of the life cycle of a product. During this stage, the product is launched in the market, and the focus of the business is to create awareness and generate interest. This stage is characterized by low sales, as the product is new, and consumers are not yet familiar with it.
Marketing efforts during the introduction stage are focused on creating brand awareness and educating consumers about the product’s features and benefits. The pricing strategy is usually a penetration pricing strategy, which involves setting the price lower than the competition to encourage adoption.
In this stage, the business must invest heavily in research and development, marketing, and distribution to create awareness and generate demand for the product.
2. Growth Stage
During the second stage, sales of the merchandise begin to grow rapidly, and the business starts to see a return on its investment. As the product becomes more popular, the business may start to face competition from other players in the market.
Marketing efforts during the growth stage are focused on building brand loyalty, increasing market share, and expanding distribution channels. The pricing strategy may shift to a value-based pricing strategy, which involves setting the price based on the value the product provides to consumers.
3. Maturity Stage
During the third maturity stage, sales growth slows down, and the product reaches its peak in terms of market penetration. The product is now well-established in the market, and competition is intense.
Marketing efforts during the maturity stage are focused on defending market share, maintaining brand loyalty, and finding new ways to differentiate the goods from competitors. Pricing strategies during this stage may involve discounts and promotions to maintain sales, but overall pricing may become more stable.
4. Decline Stage
During this stage, sales begin to decline as the product reaches the end of its life cycle. This can be due to a range of factors, such as changes in consumer preferences, technology advances, or the emergence of new products.
Marketing efforts during the decline stage are focused on reducing costs, liquidating inventory, and phasing out the product. The business may choose to reduce the price of the product to clear remaining inventory, or they may choose to discontinue the product altogether.
5. Revival or Rejuvenation Stage
The revival or rejuvenation stage is not always present, but it can occur if the business decides to update or reposition the product in the market. During this stage, the business may introduce new features or make significant changes to the product to rekindle consumer interest.
Marketing efforts during the revival or rejuvenation stage are focused on creating buzz and excitement around the product, generating interest from consumers, and re-establishing the product’s brand image. Pricing strategies may involve a premium pricing strategy to reflect the value of the updated product.
How Can the 5 Levels of Product Help Your Marketing Activities?
The five levels of the product are a marketing concept that describes the various layers that make up a product. Understanding these five levels can help businesses to create a more effective marketing strategy by providing a better understanding of what customers want and need. In this article, we will discuss how these five levels can help your marketing activities.
1. Core Benefit
The first level is the core benefit. This level represents the fundamental benefit or problem-solving capability that the product provides to the customer. Understanding the core benefit of the product can help businesses to focus their marketing efforts on the key problem or need that the merchandise addresses for the customer.
By highlighting the core benefit, businesses can attract customers who are looking for a solution to that particular problem.
2. Generic Product
The second level is the generic product. This level represents the basic features and attributes of the product. Understanding the generic product level can help businesses to differentiate their products from those of competitors.
By highlighting the unique features and attributes of the product, businesses can create a competitive advantage and attract customers who are looking for those specific features.
3. Expected Product
The third level is the expected product. This level represents the minimum level of quality and performance that customers expect from the product. Understanding the expected product level can help businesses to ensure that their products meet the minimum standards of quality and performance that customers expect.
By exceeding the expected product level, businesses can create a positive brand image and attract customers who are looking for high-quality products.
4. Augmented Product
The fourth level is the augmented product. This level represents the additional features and services that enhance the value of the product for the customer. Understanding the augmented product level can help businesses to create a more comprehensive offering that provides additional benefits and services to the customer.
When providing these additional features and services, businesses can create a more compelling value proposition and attract customers who are looking for a more complete solution.
5. Potential Product
The fifth level is the potential product. This level represents the future potential of the product, including possible enhancements and new features. Understanding the potential product level can help businesses to anticipate the changing needs and wants of their customers and develop new features and enhancements to meet those needs.
By constantly innovating and improving the product, businesses can stay ahead of the competition and attract customers who are looking for the latest and greatest features.
In conclusion, understanding the five levels of product can help businesses to develop a more effective marketing strategy by providing a better understanding of what customers want and need from their products.
By focusing on the core benefit, differentiating the product, meeting customer expectations, providing additional features and services, and constantly innovating and improving, businesses can create a more compelling value proposition and attract customers who are looking for a complete solution to their needs.
What is the most important level of product?
All the levels of a product are important as they all contribute to the overall success of the product in the market. However, the most important level of the product may vary depending on the specific product and market.
For instance, the core benefit level is often considered the most important level for products that are designed to solve a specific problem or fulfill a particular need. If a product cannot deliver on its core benefit, then it will not be successful in the market, no matter how many additional features or services it offers.
On the other hand, for products that are in a highly competitive market, the augmented product level may be the most important. By offering additional features and services, a business can differentiate its product from competitors and create a more compelling value proposition for customers.
The expected product level is also crucial for establishing a minimum level of quality and performance that customers expect from the product. A product that fails to meet the minimum expectations of customers will not succeed in the market.
Overall, it is important to focus on all the levels of product in order to create a comprehensive product offering that meets the needs and wants of customers. By delivering on the core benefit, providing additional features and services, meeting customer expectations, and constantly innovating and improving, businesses can create a more successful product that meets the needs of their target market.
In order to understand the trajectory of a product’s success, it’s important to recognize the stages of the product life cycle, from development to decline; for instance, a finance company offering credit cards may observe this cycle and utilize different strategies accordingly.
Watch this video for some additional marketing strategies that you can use when promoting your new goods:
What is product life cycle management?
Product life cycle management (PLM) is the process of managing a product from its conception, through its design and manufacture, to its retirement or disposal. It involves coordinating and optimizing all aspects of a product’s life cycle, including its development, launch, growth, maturity, and decline phases.
PLM involves cross-functional collaboration between teams responsible for product design, engineering, manufacturing, marketing, sales, and customer service. It typically includes the use of specialized software tools to manage and track product data, such as bills of materials, product specifications, and regulatory compliance information.
The goal of PLM is to maximize the value and profitability of a product by ensuring that it is designed and manufactured efficiently, marketed effectively, and supported throughout its entire life cycle. This can help organizations to reduce costs, improve quality, increase customer satisfaction, and stay competitive in their respective markets.
Examples of PLC
Smartphones
Relatively short life cycle – due to the rapid pace of technological advancements. New models are introduced every year or two, with older models eventually becoming obsolete.
Video game consoles
Around 5-7 years – with new models being released to replace older ones.
Automobiles
Around 7-10 years – with updates and facelifts being made to existing models before they are eventually replaced with a new model.
Fashion clothing
Short life cycle – with new styles and trends being introduced every season. Older styles are quickly replaced by new ones.
Soft drinks
Relatively stable life cycle – with few major changes to the product over time.
Digital cameras
Around 2-3 years – with new models being introduced with upgraded features and capabilities.
Printers
Around 3-5 years – with new models being introduced with improved printing speeds, quality, and features.
Household appliances
Appliances like refrigerators, washing machines, and ovens have a life cycle of around 10-15 years – with newer models being introduced with improved energy efficiency and features.
Personal computers
Around 3-5 years – with new models being introduced with faster processors, improved graphics, and better storage capacity.
Televisions
Around 5-7 years – with new models being introduced with improved picture quality, larger screen sizes, and new features like smart TV capabilities.
What are the 5 stages in marketing?
Development: This is the initial stage where a new product is developed, tested, and refined. This stage involves extensive research and development, product testing, and prototyping to ensure that the merchandise meets the needs and wants of the target market.
Introduction: In this stage, the goods are launched into the market. This involves marketing and promotional activities to create awareness and generate interest in the product among the target audience. The company may also offer introductory pricing or other incentives to encourage customers to try the product.
Growth: As the product gains acceptance in the market, sales begin to increase rapidly. The growth stage is characterized by increasing sales volume and market share. The company may also introduce new product variations or versions to meet the evolving needs of the market.
Maturity: The maturity stage is the longest and most stable phase. Sales growth slows down, and the product reaches its peak in terms of market penetration and profitability. In this stage, the company focuses on maintaining its market share and extending the product life cycle through marketing efforts such as product improvements, new packaging, or other promotional strategies.
Decline: The final stage is the decline phase. Sales and profits begin to decline as the product becomes outdated or loses its relevance to the market. In this stage, the company may discontinue the product or offer it at reduced prices to liquidate inventory.
FAQs
1. What are some examples of products in the growth stage, maturity stage and decline stage?
Examples of products in the growth stage include: smartphones, electric vehicles, and streaming services.
Goods in the maturity stage include: traditional automobiles, televisions, and personal computers.
And in the decline stage, they include: landline phones, cassette tapes, and VHS tapes.
2. How can companies manage products in the decline stage?
Companies can manage products in the decline stage by either discontinuing the product or rejuvenating it through product innovation or repositioning. In some cases, companies may also decide to maintain the product in a niche market.
3. What are common challenges companies face during the product life cycle?
Some common challenges companies face during the product life cycle include intense competition, changing consumer preferences, and technological advancements that may render the product obsolete.
4. How can companies anticipate the end of the product life cycle?
Companies can anticipate the end of the product life cycle by monitoring sales trends, consumer feedback, and competitor activities. Market research and customer surveys can also provide valuable insights into shifting market demand.
5. Can products skip a stage in the product life cycle?
It is possible for products to skip a stage in the product life cycle. For example, a new product may skip the introduction stage if it is similar to an existing product and has a ready market.
Once you’ve established your business, understanding the product life cycle can be crucial to making informed decisions about your products and services, from marketing and pricing to development and growth. By following this framework, you can maximize the potential of your products and steer your business toward long-term success.
Conclusion
Understanding the life cycle of a product is important for companies to plan their marketing activities effectively. By identifying which stage a product is in, a company can develop appropriate marketing strategies and tactics to maximize sales and profitability.
For example, in the growth stage, a company may focus on expanding its distribution network or increasing advertising to capture a larger market share, while in the maturity stage, the company may focus on merchandise differentiation and extending the product’s life cycle.
In conclusion, the product life cycle is an essential concept for businesses to understand as it can inform their marketing, pricing, and development strategies. By understanding the different stages, businesses can make informed decisions about when to invest in research and development, how to price their goods, and how to market and distribute their goods to maximize their return on investment.
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