Product Life cycle

 Product Life cycle

The term product life cycle refers to the length of time a product is introduced to consumers 

into the market until it's removed from the shelves. The life cycle of a product is broken into 

four stages—introduction, growth, maturity, and decline. This concept is used by 

management and by marketing professionals as a factor in deciding when it is appropriate to 

increase advertising, reduce prices, expand to new markets, or redesign packaging. The 

process of strategizing ways to continuously support and maintain a product is called product 

life cycle management.

How Product Life Cycles Work

Products, like people, have life cycles. A product begins with an idea, and within the confines 

of modern business, it isn't likely to go further until it undergoes research and 

development (R&D) and is found to be feasible and potentially profitable. At that point, the 

product is produced, marketed, and rolled out.

As mentioned above, there are four generally accepted stages in the life cycle of a product—

introduction, growth, maturity, and decline.

• Introduction: This phase generally includes a substantial investment in advertising and 

a marketing campaign focused on making consumers aware of the product and its 

benefits.

• Growth: If the product is successful, it then moves to the growth stage. This is 

characterized by growing demand, an increase in production, and expansion in its 

availability.

• Maturity: This is the most profitable stage, while the costs of producing and 

marketing decline.

• Decline: A product takes on increased competition as other companies emulate its 

success—sometimes with enhancements or lower prices. The product may 

lose market share and begin its decline.

When a product is successfully introduced into the market, demand increases, therefore 

increasing its popularity. These newer products end up pushing older ones out of the market, 

effectively replacing them. Companies tend to curb their marketing efforts as a new product 

grows. That's because the cost to produce and market the product drop. When demand for the 

product wanes, it may be taken off the market completely.

While a new product needs to be explained, a mature one needs to be differentiated.

The stage of a product's life cycle impacts the way in which it is marketed to consumers. A 

new product needs to be explained, while a mature product needs to be differentiated from its 

competitors.

Special Considerations

Companies that have a good handle on all four stages can increase profitability and maximize 

their returns. Those that aren't able to may experience an increase in their marketing and 

production costs, ultimately leading to the limited shelf life for their product(s).

Back in 1965, Theodore Levitt, a marketing professor, wrote in the Harvard Business Review 

that the innovator is the one with the most to lose because so many truly new products fail at 

the first phase of their life cycle—the introductory stage. The failure comes only after the 

investment of substantial money and time into research, development, and production. And 

that fact, he wrote, prevents many companies from even trying anything really new. 

Instead, he said, they wait for someone else to succeed and then clone the success.1

Examples of Product Life Cycles

Many brands that were American icons have dwindled and died. Better management of 

product life cycles might have saved some of them, or perhaps their time had just come. 

Some examples:

• Oldsmobile began producing cars in 1897 but the brand was killed off in 2004. Its 

gas-guzzling muscle-car image lost its appeal, General Motors decided.

• Woolworth's had a store in just about every small town and city in America until it 

shuttered its stores in 1997. It was the era of Walmart and other big-box stores.

• Border's bookstore chain closed down in 2011. It couldn't survive the internet age.

To cite an established and still-thriving industry, television program distribution has related 

products in all stages of the product life cycle. As of 2019, flat-screen TVs are in the mature 

phase, programming-on-demand is in the growth stage, DVDs are in decline, and the 

videocassette is extinct.

Many of the most successful products on earth are suspended in the mature stage for as long 

as possible, undergoing minor updates and redesigns to keep them differentiated. Examples 

include Apple computers and iPhones, Ford's best-selling trucks, and Starbucks' coffee—all of which undergo minor changes accompanied by marketing efforts—are designed to keep 

them feeling unique and special in the eyes of consumers.

New Product Development Process

1. Idea generation

The first step in new-product development is idea generation.

New ideas can be generated by:

1. Conducting marketing research to find out the consumers' needs and wants.

2. Inviting suggestions from consumers.

3. Inviting suggestions from employees.

4. Brainstorming suggestions for new-product ideas.

5. Searching in different markets viz., national and international markets for new-product 

ideas.

6. Getting feedback from agents or dealers about services offered by competitors.

7. Studying the new products of the competitors.

2. Idea screening

Most companies have a "Idea Committee." This committee studies all the ideas very 

carefully. They select the good ideas and reject the bad ideas.

Before selecting or rejecting an idea, the following questions are considered or asked:

1. Is it necessary to introduce a new product?

2. Can the existing plant and machinery produce the new product?

3. Can the existing marketing network sell the new product?

4. When can the new product break even?

If the answers to these questions are positive, then the idea of a new-product development is 

selected else it is rejected. This step is necessary to avoid product failure.

3. Concept testing

Concept testing is done after idea screening. It is different from test marketing.

In this stage of concept testing, the company finds out:

1. Whether the consumers understand the product idea or not?

2. Whether the consumers need the new product or not?

3. Whether the consumers will accept the product or not?

Here, a small group of consumers is selected. They are given full information about the new 

product. Then they are asked what they feel about the new product. They are asked whether 

they like the new product or not. So, concept testing is done to find out the consumers' 

reactions towards the new product. If most of the consumers like the product, 

then business analysis is done.

4. Business analysis

Business analysis is a very important step in new-product development. Here, a detailed 

business analysis is done. The company finds out whether the new product is commercially 

profitable or not.

Under business analysis, the company finds out...

1. Whether the new product is commercially profitable or not?

2. What will be the cost of the new product?

3. Is there any demand for the new product?

4. Whether this demand is regular or seasonal?

5. Are there any competitors of the new product?

6. How the total sales of the new product be?

7. What will be the expenses on advertising, sales promotion, etc.?

8. How much profit the new product will earn?

So, the company studies the new product from the business point of view. If the new product 

is profitable, it will be accepted else it will be rejected.

5. Product development

At this stage, the company has decided to introduce a new product in the market. It will take 

all the necessary steps to produce and distribute the new product. The production department 

will make plans to produce the product. The marketing department will make plans to 

distribute the product. The finance department will provide finance for introducing the new 

product. The advertising department will plan the advertisements for the new product. 

However, all this is done as a small scale for Test Marketing.

6. Test marketing

Test marketing means to introduce the new product on a very small scale in a very small 

market. If the new product is successful in this market, then it is introduced on a large scale. 

However, if the product fails in the test market, then the company finds out the reasons for its.

failure. It makes necessary changes in the new product and introduces it again in a small 

market. If the new product fails again the company will reject it.

Test marketing reduces the risk of large-scale marketing. It is a safety device. It is very time-

consuming. It must be done especially for costly products.

7. Commercialization

If the test marketing is successful, then the company introduces the new product on a large 

scale, say all over the country. The company makes a large investment in the new product. It 

produces and distributes the new product on a huge scale. It advertises the new product on the 

mass media like TV, Radio, Newspapers, and Magazines, etc.

8. Review of market performance

The company must review the marketing performance of the new product.

It must answer the following questions:

1. Is the new product accepted by the consumers?

2. Are the demand, sales and profits high?

3. Are the consumers satisfied with the after-sales-service?

4. Are the middlemen happy with their commission?

5. Are the marketing staffs happy with their income from the new product?

6. Is the Marketing manager changing the marketing mix according to the changes in the 

environment?

7. Are the competitors introducing a similar new product in the market?

The company must continuously monitor the performance of the new product. They must 

make necessary changes in their marketing plans and strategies else the product will fail.

 Product brand (earlier explain)

Branding is the process of developing a unique name and identity for a product or business. 

Branding ensures awareness and credibility for a brand, creates customer loyalty, among 

other advantages. Building a brand takes time and involves a lot of resources. It is however 

an important marketing tool for stimulating recognition.

A product, service, person or place that is branded automatically develops a personality as 

well as reputation. Businesses and individuals can as such take advantage of the various types 

of branding that are available.

1. Product Branding:

This is the most common and easiest type of branding. Product branding is a symbol or 

design that identifies and differentiates a product from other products. Product branding is 

very easily noticeable when you walk through a supermarket filled with different products as 

most products are branded with a unique colour, design and logo.

2. Personal Branding:

This type of branding is very common among politicians, athletes and celebrities. Personal 

branding makes it possible for famous people to reflect a good image of themselves to the 

public. Politicians, for instance, use personal branding to create a good impression and 

convince voters that they are right for an office.

3. Corporate Branding:

This type of branding is used by businesses interested in creating and maintaining a good 

reputation. Corporate branding thus cuts across an organisation’s services, products, 

employees, corporate culture as well as corporate social responsibility. Every activity carried 

out by an organisation has a positive or negative effect on its reputation A wrong decision can 

in fact have an adverse effect on the corporate brand.

4. Geographical Branding:

This type of branding is used for specific services and products that are peculiar to a 

particular region. Geographical branding is commonly used in the tourism industry. Various 

countries and regions try to brand things that make them different from other areas. 

Landscape, cuisine, tourist centres within a popular region are usually advertised and 

eventually become associated with the region.

5. Retail Branding:

Retail branding is mostly used by industry giants to increase the interest of consumers and 

make product sales outpace the competition. A lot of money is spent to develop unique brand 

images that convince consumers to select their brand instead of others. Retail branding 

however requires a lot of planning. The right strategy needs to be adopted to ensure its 

success.

6. Co-Branding:

Co-branding is a type of branding that associates the brands of two or more companies with a 

specific product or service. It can also be described as marketing partnership between two or 

more brands such that the success of one brand rubs off on the other. Co-branding is effective 

in building business, increasing awareness and breaking into new markets.

Packaging (Earlier Explained)

Packaging is the science, art and technology of enclosing or protecting products for 

distribution, storage, sale, and use. Packaging also refers to the process of designing, 

evaluating, and producing packages. Packaging can be described as a coordinated system of 

preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, 

protects, preserves, transports, informs, and sells

The history of packaging dates back to the year 1035, when a Persian traveller, visiting 

markets in Cairo, noted that vegetables, spices and hardware were wrapped in paper for the 

customers after they were sold. With the passage of time, attempts were made to use the 

natural materials available, such as, Baskets of reeds, wooden boxes, pottery vases, woven 

bags etc. However, the use of card board’s paperboard cartons was first done in the 19th 

century.The Michigan State University was the first to offer a degree course in “Packaging

Engineering” Since then, there has been no looking back. The packaging industry boomed as 

more than the content, it is the ”packaging” which attracts the attention of the buyer.

Packaging is the general group of activities which concentrate in formulating the design of a 

package, and producing an appropriate and attractive container or wrapper for the product. 

Packing refers to the wrapping and crating of goods before they are transported or stored.

The following are the objectives of packing and packaging:

1. To Provide Physical Protection:

2. To Enable Marketing:

3. To Convey Message:

4. To Provide Convenience:

5. To Provide Containment or Agglomeration:

6. To Provide Portion Control:

7. To Enable Product Identification:

8. To Enhance Profits:

9. To Enable Self-Service Sales:

10. To Enhance Brand Image: