Introduction
Delve into the stages of the product life cycle in this comprehensive overview. From introduction to maturity and decline, learn how products evolve in the market.
The Product Life Cycle: A Comprehensive Overview
- In this brief video, we’re going to focus on discussing the product life cycle. The product life cycle is essentially a series of stages that products, much like humans, go through from growth to maturity into eventual demise. Products cannot last forever, and some go through the product life cycle to varying degrees. Some can go through them in a matter of weeks or months, while some can last for multiple decades before being retooled or redesigned to delay the process of inevitable demise. Let’s go through the product life cycle. The first stage is the introduction stage, where products are introduced to the marketplace. During this stage, there is a focus on raising awareness, describing features and benefits, and heavy advertising expenditures. Typically, companies operate at a loss during this stage due to significant promotional and developmental costs. Examples of products in the introduction stage include 3D televisions.
The Evolution of Products in the Market Lifecycle
- The adoption rates of new products can vary widely at different stages of the market lifecycle. Electric vehicles, for instance, are currently in the introduction stage, despite efforts to promote their environmentally friendly features. While we are aware of their existence and development, widespread adoption has yet to occur, keeping them in this early phase. The high failure rate in the introduction stage is often attributed to the substantial financial resources required. However, being a pioneer in this stage can provide a competitive advantage due to the lack of market saturation. Moving on to the growth stage, sales start to climb significantly, attracting more customers and showing a profit. Competition increases as more companies enter the market with similar products.
The Evolution of Smartphone Design and Market Growth
- Apple pioneered the design and functionality of smartphones, leading to the rise of new entrants like Google’s Android operating system, HTC, Samsung, and others. As the market grew, products like tablet computers also flourished with increasing sales and competition. Companies like Microsoft and Google developed their own versions of tablets to capitalize on the growing industry. In the growth stage, product differentiation becomes crucial to stand out amidst competitors. Moving into the maturity stage, sales eventually decline as competition increases, leading to a shift towards competing on price rather than product differentiation.
The Product Life Cycle: Understanding the Stages
- In the world of business, products go through different stages known as the product life cycle. The first stage is the introduction stage, where a product is launched and begins to gain traction in the market. As the product gains popularity, it enters the growth stage, where sales and profits start to increase. However, as more competitors enter the market, the product reaches the maturity stage. In this stage, companies often engage in price cutting and increased advertising to maintain sales. Some examples of products in the maturity phase include laptop computers, netbook computers, and flat screen televisions. Products can stay in the maturity stage for decades by constantly innovating and adding new features. Eventually, products enter the decline stage, where sales start to fall. Companies may reduce support for these products as they exit the market. Despite falling sales, companies can still maintain profitability in this stage by cutting back on promotional expenses.
The Evolution of Technology: Adapting to the Changing Market Trends
- Desktop computers and laptops, once at the forefront of technology, are now facing a transition as newer innovations take center stage. Sales of laptops are gradually declining each quarter, signaling a shift in consumer preferences. Similarly, desktop computers, while still present in the market, are experiencing a slowdown in sales due to rapid technological advancements. Companies like Apple are continuously updating their product lines, but the overall trend points towards a decrease in sales. Other products like VCRs, AM/FM radios, and even iPods are also witnessing a decline in sales, despite efforts by companies to revamp and retool them to attract customers. The key question here is how to prevent products from going through the decline phase too quickly. One effective strategy is to redesign and repurpose them. For instance, repositioning baking soda from a cooking product to a deodorizer helped sustain its demand and prevented it from declining. Companies often strategize their product portfolio to introduce new offerings that can offset the eventual decline of existing products. This phenomenon is prevalent in various industries, especially in the rapidly changing technology sector.
Conclusion
The product life cycle offers valuable insights into how products evolve in the market, from introduction to decline. Understanding these stages can help businesses adapt and innovate effectively.