In which stage of the product life cycle should product strategy focus on improved cost control *?

The product life cycle contains four distinct stages: introduction, growth, maturity and decline. Each stage is associated with changes in the product's marketing position. You can use various marketing strategies in each stage to try to prolong the life cycle of your products.

Product introduction strategies

Marketing strategies used in the introduction stages include:

• rapid skimming - launching the product at a high price and high promotional level
• slow skimming - launching the product at a high price and low promotional level
• rapid penetration - launching the product at a low price with significant promotion
• slow penetration - launching the product at a low price and minimal promotion

During the introduction stage, you should aim to:

• establish a clear brand identity
• connect with the right partners to promote your product
• set up consumer tests, or provide samples or trials to key target markets
• price the product or service as high as you believe you can sell it, and to reflect the quality level you are providing

You could also try to limit the product or service to a specific type of consumer - being selective can boost demand. Read more about the introduction stage of a product life cycle.

Product growth strategies

Marketing strategies used in the growth stage mainly aim to increase profits. Some of the common strategies to try are:

• improving product quality
• adding new product features or support services to grow your market share
• entering new markets segments
• keeping pricing as high as is reasonable to keep demand and profits high
• increasing distribution channels to cope with growing demand
• shifting marketing messages from product awareness to product preference
• skimming product prices if your profits are too low

The growth stage is when you should see rapidly rising sales, profits and your market share. Your strategies should seek to maximise these opportunities.

Product maturity strategies

When your sales peak, your product will enter the maturity stage. This often means that your market will be saturated and you may find that you need to change your marketing tactics to prolong the life cycle of your product. Common strategies that can help during this stage fall under one of two categories:

• market modification - this includes entering new market segments, redefining target markets, winning over competitor's customers, converting non-users
• product modification - for example, adjusting or improving your product's features, quality, pricing and differentiating it from other products in the marking

Read more about the growth and maturity stage of a product life cycle.

Product decline strategies

During the end stages of your product, you will see declining sales and profits. This can be caused by changes in consumer preferences, technological advances and alternatives on the market. At this stage, you will have to decide what strategies to take. If you want to save money, you can:

• reduce your promotional expenditure on the products
• reduce the number of distribution outlets that sell them
• implement price cuts to get the customers to buy the product
• find another use for the product
• maintain the product and wait for competitors to withdraw from the market first
• harvest the product or service before discontinuing it

Another option is for your business to discontinue the product from your offering. You may choose to:

• sell the brand to another business
• significantly reduce the price to get rid of all the inventory

Many businesses find that the best strategy is to modify their product in the maturity stage to avoid entering the decline stage. Find out more about product life cycle - decline stage.

A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market. A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline.

Nội dung chính

• How Does it Work?
• 1. Market Introduction and Development
• 2. Market Growth
• 3. Market Maturity
• 4. Market Decline
• Product Life Cycle Strategy and Management
• 1. Typewriters
• 2. Video Cassette Recorders (VCRs)
• 3. Electric Vehicles
• 4. AI Products
• In which stage of product life cycle should product strategy focus on process modifications as the product is being fine tuned for the market?
• In which stage of the product life cycle should product strategy focus on forecasting capacity requirements A Introduction B growth C maturity d decline?
• Which stage of the product life cycle is important to broaden distribution of the product?
• At what stage of the product life cycle does it first become true that most consumers?

Product life cycles are used by management and marketing professionals to help determine advertising schedules, price points, expansion to new product markets, packaging redesigns, and more. These strategic methods of supporting a product are known as product life cycle management. They can also help determine when newer products are ready to push older ones from the market.

Contents

Click the links below to skip to the section in the guide:

• How does it work?
• Stages
• Product life cycle strategy and management
• Examples
• Conclusion

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How Does it Work?

As mentioned above, there are four stages in a product’s life cycle - introduction, growth, maturity, and decline – but before this a product needs to go through design, research and development. Once a product is found to be feasible and potentially profitable it can be produced, promoted and sent out to the market. It is at this point that the product life cycle begins.

The various stages of a product’s life cycle determine how it is marketed to consumers. Successfully introducing a product to the market should see a rise in demand and popularity, pushing older products from the market. As the new product becomes established, the marketing efforts lessen and the associated costs of marketing and production drop. As the product moves from maturity to decline, so demand wanes and the product can be removed from the market, possibly to be replaced by a newer alternative.

Managing the four stages of the life cycle can help increase profitability and maximise returns, while a failure to do so could see a product fail to meet its potential and reduce its shelf life.

Writing in the Harvard Business Review in 1965, marketing professor Theodore Levitt declared that the innovator had the most to lose as many new products fail at the introductory stage of the product life cycle. These failures are particularly costly as they come after investment has already been made in research, development and production. Because of this, many businesses avoid genuine innovation in favour of waiting for someone else to develop a successful product before cloning it.

Stages

There are four stages of a product’s life cycle, as follows:

1. Market Introduction and Development

This product life cycle stage involves developing a market strategy, usually through an investment in advertising and marketing to make consumers aware of the product and its benefits.

At this stage, sales tend to be slow as demand is created. This stage can take time to move through, depending on the complexity of the product, how new and innovative it is, how it suits customer needs and whether there is any competition in the marketplace. A new product development that is suited to customer needs is more likely to succeed, but there is plenty of evidence that products can fail at this point, meaning that stage two is never reached.  For this reason, many companies prefer to follow in the footsteps of an innovative pioneer, improving an existing product and releasing their own version.

2. Market Growth

If a product successfully navigates through the market introduction it is ready to enter the growth stage of the life cycle. This should see growing demand promote an increase in production and the product becoming more widely available.

The steady growth of the market introduction and development stage now turns into a sharp upturn as the product takes off. At this point competitors may enter the market with their own versions of your product – either direct copies or with some improvements. Branding becomes important to maintain your position in the marketplace as the consumer is given a choice to go elsewhere. Product pricing and availability in the marketplace become important factors to continue driving sales in the face of increasing competition. At this point the life cycle moves to stage three; market maturity.

3. Market Maturity

At this point a product is established in the marketplace and so the cost of producing and marketing the existing product will decline. As the product life cycle reaches this mature stage there are the beginnings of market saturation. Many consumers will now have bought the product and competitors will be established, meaning that branding, price and product differentiation becomes even more important to maintain a market share. Retailers will not seek to promote your product as they may have done in stage one, but will instead become stockists and order takers.

4. Market Decline

Eventually, as competition continues to rise, with other companies seeking to emulate your success with additional product features or lower prices, so the life cycle will go into decline. Decline can also be caused by new innovations that supersede your existing product, such as horse-drawn carriages going out of fashion as the automobile took over.

Many companies will begin to move onto different ventures as market saturation means there is no longer any profit to be gained. Of course, some companies will survive the decline and may continue to offer the product but production is likely to be on a smaller scale and prices and profit margins may become depressed. Consumers may also turn away from a product in favour of a new alternative, although this can be reversed in some instances with styles and fashions coming back into play to revive interest in an older product.

Product Life Cycle Strategy and Management

Having a properly managed product life cycle strategy can help extend the life cycle of your product in the market.

The strategy begins right at the market introduction stage with setting of pricing. Options include ‘price skimming,’ where the initial price is set high and then lowered in order to ‘skim’ consumer groups as the market grows. Alternatively, you can opt for price penetration, setting the price low to reach as much of the market as quickly as possible before increasing the price once established.

Product advertising and packaging are equally important in order to appeal to the target market. In addition, it is important to market your product to new demographics in order to grow your revenue stream.

Products may also become redundant or need to be pivoted to meet changing demands. An example of this is Netflix, who moved from a DVD rental delivery model to subscription streaming.

Understanding the product life cycle allows you to keep reinventing and innovating with an existing product (like the iPhone) to reinvigorate demand and elongate the product’s market life.

Examples

Many products or brands have gone into decline as consumer needs change or new innovations are introduced. Some industries operate in several stages of the product life cycle simultaneously, such as with televisual entertainment, where flat screen TVs are at the mature phase, on-demand programming is in the growth stage, DVDs are in decline and video cassettes are now largely redundant. Many of the most successful products in the world stay at the mature stage for as long as possible, with small updates and redesigns along with renewed marketing to keep them in the thoughts of consumers, such as with the Apple iPhone.

Here are a few well-known examples of products that have passed or are passing through the product life cycle:

1. Typewriters

The typewriter was hugely popular following its introduction in the late 19th century due to the way it made writing easier and more efficient. Quickly moving through market growth to maturity, the typewriter began to go into decline with the advent of the electronic word processor and then computers, laptops and smartphones. While there are still typewriters available, the product is now at the end of its decline phase with few sales and little demand. Meanwhile, desktop computers, laptops, smartphones and tablets are all experiencing the growth or maturity phases of the product lifecycle.

2. Video Cassette Recorders (VCRs)

Having first appeared as a relatively expensive product, VCRs experienced large-scale product growth as prices reduced leading to market maturation when they could be found in many homes. However, the creation of DVDs and then more recently streaming services, VCRs are now effectively obsolete. Once a ground-breaking product VCRs are now deep in a decline stage from which it seems unlikely they will ever recover.

3. Electric Vehicles

Electric vehicles are experiencing a growth stage in their product life cycle as companies work to push them into the marketplace with continued design improvements. Although electric vehicles are not new, the consistent innovation in the market and the improving sales potential means that they are still growing and not yet into the mature phase.  

4. AI Products

Like electric vehicles, artificial intelligence (AI) has been in development and use for years, but due to the continued developments in AI, there are many products that are still in the market introduction stage of the product life cycle. These include innovations that are still being developed, such as autonomous vehicles, which are yet to be adopted by consumers.

Conclusion

Understanding how a product’s life cycle works allows companies to work out whether their products are meeting the needs of the target market and, thereby, when they may need to change focus or develop something new.

Examining a product in relation to market needs, competition, costs and profits allows a company to pivot their product focus to maintain longevity in the marketplace.

Knowing when a product is going into decline prevents your company from following as a result of being overly reliant on a fading market. A product life cycle strategy means that you can reinvigorate an existing product, develop a new replacement product or change direction to stay abreast of a changing marketplace.

While all products have a life cycle, many of the most successful ones are able to maintain the mature stage of the life cycle for many years before any eventual decline.

In which stage of product life cycle should product strategy focus on process modifications as the product is being fine tuned for the market?

Many businesses find that the best strategy is to modify their product in the maturity stage to avoid entering the decline stage.

In which stage of the product life cycle should product strategy focus on forecasting capacity requirements A Introduction B growth C maturity d decline?

b . In the growth stage of the product lifecycle, the management may focus on the product strategy by forecasting the capacity requirement.

Which stage of the product life cycle is important to broaden distribution of the product?

In the maturity stage of the product life cycle, a company will start broadening the product's audience, use, and availability. It is now able to maintain a consistent market share. A company will also continue to increase its production and logistics as demand continues to grow.

At what stage of the product life cycle does it first become true that most consumers?

During the growth stage, consumers have accepted the product in the market and customers are beginning to truly buy in. That means demand and profits are growing, hopefully at a steadily rapid pace. The growth stage is when the market for the product is expanding and competition begins developing.

Which stage of the product life cycle is product strategy likely to focus on improved cost control?

In which stage of the product life cycle should product strategy focus on process modifications as the?

In which stage of the product life cycle should product strategy focus on forecasting capacity requirements A Introduction B growth C maturity d decline?

Which of the following is a key marketing strategy of the maturity phase of a product life cycle?