Believe it or not a product has a life cycle, just like plants and animals do. In this cycle there are the four stages consisting of: Introduction, Growth, Maturity and Decline. By understanding these stages businesses can get a better idea of when and how to market their products. It also helps in knowing when to make modifications to products or when to exit the market. Whether or not the product is a new, highly innovative product, such as the iPad in 2010, or a less innovative product, like a new soft drink flavour, the life cycle is a similar process.
The beginning of the life cycle begins when a new, innovative product comes into existence and enters into the market. At this point there may be little to no competitors making it a clean slate for marketing. However, due to initial losses from start-up costs and low level of sales revenue marketing resources may be scarce. During this stage it is a business should be seeking out their audiences and finding appropriate market segments.
At this stage the number of sales begins to take off with the increase of product adopters. What also increases, however, is the number of competitors that exist. Emphasising more in marketing will allow your product to increase the market share it holds.
After spending some time in the market, there should be more apparent segmentations and consumer preferences. Creating and advertising adaptations of your product, such as colour, styles and features, aid in keeping sales on the rise and staying ahead of competitors.
This stage of the life cycle is determined to be when the late majority of consumers adopt the product and firms are in an intense competition for market share. To remain in competition with competitors, marketing costs often increase in order to remain relevant with consumers.
During this Maturity stage, the market will generally become saturated, with nearly all the potential customers having already adopted the product. It’s at this stage where business should begin to explore other options to remain in a market. These other options include alternate market segments that have shown interest, new markets and even shifting to a new product.
Upon reaching the Decline stage businesses are generally face with 3 options. First is to hope they have found a niche segment that can provide for continuous sales. The vinyl record market, for example, is no where as large as it once was but it still holds a small, but steady demand. In this situation marketing efforts would end up decreasing to avoid over allocating resources but still would be required. It would call for more specific marketing now targeting the particular niche it has established.
The second option would be when a business has managed to either find a new market for their product or further develop a product to retain demand for it. Of course depending on how the product evolves, so should the marketing that goes along with it. Whether it be a change in the platforms and type of media used or the type of message about the product conveyed, a refresh in the product calls for a refresh in the marketing.
The third option would come into play when a business has not managed to establish a niche nor find a way to retain a demand for the product. This would be the point where a product would exit the market. Ideally, by this point the business has developed other products so it can shift still make use of the brand it has built from the original product.
If you would like to read up on more ways to transform your brand, check out our other journals here!