As you may have guessed, the term product life cycle, predominantly applies to companies manufacturing and selling products.
Having said that, much of this can just as easily apply if you consider each service you sell as a product.
So, what is the product life cycle?
It refers to the phases a product goes through from initial creation and sale, through to decline – when it is at the end of its life.
When a product is first introduced to the market, marketing is centred around awareness – getting customers to try it, and can often be priced as a premium product, in an effort to recoup development costs. Of course, this largely depends on what the product is, and if it is an entirely new and innovative product that will require consumers to think very differently, as opposed to a new product in an already existing space.
For example, the iPhone was seen as innovative and new, although it launched in the existing mobile phone sector.
Growth is the phase where a company tries to really ramp up and promote a product. The aim, particularly in fast moving consumer goods, is to dominate the market, and become the brand leader or number two. Promotion would include advertising and price promotion to encourage sales. At this stage, the company has ironed out any hiccups and is starting to enjoy better profits.
Maturity is the stage where a company will be defending the market share – trying to stay in the top 2 or 3 for as long as possible. They may consider introducing new features or adding product modifications at this stage, to maintain the life of the product for as long as possible.
Decline is the final phase, where sales of the product are tailing off, usually as new more innovative products enter the market. Marketing spend reduces now, as companies start to focus on other products in their portfolio.
You are probably wondering why you need to know this, and in truth, you don’t.
However, whether you sell products or services you do need to understand, over time, the desire for some products/services will reduce, and, therefore, it is important you constantly evaluate sales.
Channel your own marketing into products/services that are not reducing in popularity. Shed products where sales have tailed off, in order to offer new ranges.
Ifyou’d like help with getting your marketing sorted,
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