Product Life Cycle: Stages and Example

Product Life Cycle comprises four stages: production, growth, maturity and decline. Businesses must understand the PLC to make informed marketing, pricing, and product management decisions to optimize profitability and competitiveness. Let's understand the stages of the product life cycle in detail. 

Imagine a smartphone model that was a sensation 10 years ago, occupying prime space in every mobile store. At launch, it was in the Introduction stage, creating buzz and gaining initial users. It soon hit the Growth stage, with skyrocketing demand and long store queues. Reaching the Maturity stage, sales stabilized as market saturation approached.

Yet, newer models with advanced features emerged, pushing it into the Decline stage. Now, it’s a thing of the past, replaced by newer versions, showing how products go through the stages of the Product Life Cycle. This helps marketers plan better at each stage, aligning strategies with market changes to maximize profits and stay competitive.

Table of Content

• What is the Product Life Cycle? 
• Stages of Product Life Cycle
  • Introduction Stage
  • Growth Stage
  • Maturity Stage
  • Decline Stage
• Advantages of Product Life Cycle
• Product Life Cycle Examples
• Challenges of Product Life Cycle

What is Product Life Cycle? 

The Product Life Cycle is defined as the timeline of the product from the moment it enters the market until companies withdraw it from the market. The PLC concept is widely used in marketing and product management to understand how products evolve and how companies can adjust their strategies to maximize sales and profits. This concept is used by management and marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging. 

Marketing professionals and strategists use product life cycles to decide on various factors, such as when to change pricing and advertising strategy, expand into new markets, or change packaging strategy. Managing a product’s life cycle is known as Product Life Cycle Management. 

Stages of Product Life Cycle

Product Life Cycle (PLC) is a concept that explains the different stages a product goes through, from its introduction to the market to its eventual decline. The four stages of the PLC include Introduction, Growth, Maturity, and Decline. Let's understand these stages in detail and how they work.  

Introduction Stage

A new product is launched in the Introduction stage of the Product Life Cycle (PLC). At this phase, awareness creation is crucial. Hence, substantial promotional efforts are required to inform potential customers about the product. It's a critical stage as it sets the first impression and a foundation for the product's acceptance in the market. Initial sales growth, market positioning, and consumer engagement begin here. It’s vital for the product's future success and determining the pace at which it moves to the next stage, Growth.

Products which are in the Introduction stage include:

• Generative AI Tools

• Virtual Reality (VR) Headsets

• Self-Driving Cars
• Electric Vehicles
• 5G Devices

Growth Stage

In the Growth stage of the Product Life Cycle (PLC), a product enjoys a surge in customer acceptance and increasing sales. This phase is crucial for capitalizing on the product's market position by scaling production and enhancing distribution. Marketers often intensify promotional efforts to continue building market share. Analyzing customer feedback to make necessary improvements is vital, as is monitoring competition. This stage sets the pace for achieving market leadership and recovering initial investments, making it a critical phase in the product's journey toward profitability and market dominance.

Products which are in the Growth stage include:

• LED 
• Smart devices
• Online Learning Platforms
• Health and Wellness Apps
• Home Automation Products

Maturity Stage

The Maturity stage in the Product Life Cycle (PLC) is when a product reaches peak market saturation and sales growth slows. It's essential for sustaining profitability through cost management and market share retention. Strategies may include cost reduction, exploring new market segments, improving product features, and finding new applications for the product. This stage is vital as it's a turning point where the product either sustains its market position or begins to decline. It challenges product managers to innovate and make prudent decisions to extend the product’s market relevance and profitability.

Products which are in the Maturity stage include:

• Smartphones
• Personal Computers (PCs) and Laptops
• Soft Drinks
• Washing Machines
• Television Sets

Decline Stage

During the decline stage, sales and profits decline. The product becomes obsolete, and competition becomes intense. This stage focuses on minimizing costs and phasing out the product. The product is usually priced low to clear inventory. The objective during this stage is to maximize profits while phasing out the product.

Products which are in the Declining Stage:

• Feature Phones
• CRT Televisions (Cathode Ray Tube)
• Landline Phones
• Desktop Computers
• Wired Headphones

Advantages of Product Life Cycle

Companies utilize product life cycles to understand a product’s various stages, from introduction to removal from the market. The PLC market help companies make informed decisions about their products, marketing strategies and resource allocation at every stage of the product life cycle. Here are some of the benefits of understanding the PLC:

Better Decision-Making

By understanding the different stages of a product’s life cycle, businesses can make informed decisions about allocating resources, introducing new features or versions, and retiring a product. This can help them optimize their investments and maximize their returns.

Resource Optimization

Understanding the product life cycle can also help businesses optimize their resources by focusing on the most critical areas of the product’s success. This can help them minimize waste and increase efficiency, ultimately leading to cost savings.

Increased Profitability

By leveraging the PLC, businesses can increase their profitability by adopting different marketing strategies appropriate for each stage of the product’s life. This can help them capture market share, build brand equity, and generate customer loyalty, increasing revenues and profits.

Competitive Edge

By monitoring where a product is in its life cycle, businesses can stay ahead of their competitors by anticipating market trends and adapting their strategies accordingly. This can help them differentiate their product from their competitors and establish a competitive edge in the market.

Product Life Cycle Examples

Introduction Stage

Electric Cars- Electric cars are still in the introductory stage of the product life cycle, as they are a relatively new technology and are still gaining acceptance among consumers. Companies such as Tesla, Ford, and Chevrolet are all introducing new electric models to the market and are focused on generating awareness and interest in this emerging technology.

Growth Stage

Smartphones- Smartphones have been around for several years and are in the growth stage of the PLC. There is a high demand for smartphones, and companies such as Apple and Samsung are constantly introducing new models with upgraded features to keep up with customer demands.

Maturity Stage

Soft Drinks—Soft drinks, such as Coca-Cola and Pepsi, are in the maturity stage of the product life cycle (PLC). They have been around for many years and have a well-established customer base. Companies in this stage focus on maintaining market share, improving efficiency, and cutting costs.

Decline Stage

Fax Machines- Fax machines are in the decline stage of PLC. With the rise of email and other digital communication methods, fax machines have become less popular and are gradually being phased out. Companies that still produce fax machines are focused on reducing costs and generating revenue from the remaining customer base.

Challenges of Product Life Cycle

There are several challenges and limitations associated with the product life cycle, including:

Timing: The length of each stage of the PLC can vary, making it difficult for businesses to accurately predict when a product will move from one stage to the next.

Sales and profit projections: Accurately forecasting sales and profits can be challenging. It happens especially during the introduction and decline stages when there is high uncertainty.

Product cannibalization: When a business introduces a new product, it may cannibalize sales from an existing product. It will lead to lower overall sales and profits.

Competition: The competitive landscape can change quickly, making it difficult for businesses to maintain their market share and extend the PLC.

Technological advancements: Rapid technological advancements can render a product obsolete. Even if it is still in the growth or maturity stage of the PLC

Changing consumer preferences: Consumer preferences can also impact a product’s sales and profitability, making it difficult for businesses to maintain a consistent product life cycle.

Industry regulations: Industry regulations and standards can also impact a product’s life cycle. Especially when authorities introduce new regulations that make a product obsolete or unprofitable.

Conclusion

The Product Life Cycle (PLC) is how a product moves from introduction to decline. The product moves through the four stages of Introduction, Growth, Maturity, and Decline. Each PLC stage has unique characteristics and objectives. By understanding the PLC, businesses can make informed decisions about marketing, sales, and investment strategies.