What is Your Product Life Cycle?

How Does it Fit in Your Product Marketing Mix?

All products move through a product life cycle. What is product marketing mix? What is product development? What is marketing? How do these product and marketing elements fit in your marketing, and business, plan?

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And why is it important to understand your product's life cycle from a small business marketing strategy perspective?

For this discussion, consider products and services to be interchangeable. Both have life-cycles. Also recognize that your small business has its own life cycle.

What is marketing and its impact on product? How can marketing manage your product's life cycle? What is product development's impact on product marketing mix? How quickly do products move through the life cycle? You need a thorough understanding of the answers to these questions - and how they relate - when planning your marketing mix.

Your small business marketing strategy must include a product life cycle review.

All products or services move through product life-cycles. Typically these life-cycles move through four stages: entry or introduction; growth; maturity; and finally, decline.

While some life-cycles can be extremely short (for example, the pet rocks, trolls, pogs, etc. of the 80s and 90s); other product or service life-cycles can last for hundreds of years (paper, printing, etc.). As a product moves through its life cycle, the marketing approach must be adapted.

All of the information below is based on the product or service being genuinely new to its market (could be available in other markets) and based on the product or service being genuinely good and valued by the market.

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Four Product Life Cycle Stages:

1. Entry or Introduction Stage:
• Launch new product.
• Develop the market for the product.
• Build brand awareness. Advertise.
• Trademark or patent the new product if necessary.
• Consider your pricing strategy: should it be a low price to quickly gain market share; or a high price if limited competition and high cost to bring to market:
• Target Marketing distribution, place or location based on your market research: target the easiest market to enter first; you want to have early and fast wins.
• Promotional materials are developed to inform and gain awareness, understanding and acceptance of the product. Focus on an audience that likes to be an early adopter.
2. Growth Stage:
• Focus on growing market share.
• Increase brand preference: focus on product features, advantages and benefits.
• Product quality must be good. Awareness of quality focus must be a communication message.
• As product demand grows, stabilize pricing and ensure that the cost/price relationship is valid AND also supported by the market. At this stage (for new products specifically) you will have an advantage over your competition and price will not be as sensitive as in later stages.
• Enter additional markets. Your product, and its brand, will be gaining recognition and will receive easier acceptance. Demand will increase.
• Promotional materials are focused on the broader, more expanded market (and audience).
3. Mature Stage:
• Small business sales growth starts to slow down. Focus on holding on to market share and making as much profit as possible.
• Competitors have caught up to you and your product.
• Define and refine what is unique about your product: unique value proposition and strong product differentiation and product positioning (or re-positioning). If possible, and/or necessary, add new, different and unique features and benefits to your product.
• Pricing may be impacted by competitive activity. Develop alternative competitive strategy to cutting price for as long as possible.
• Distance to market may begin to cost in time and money. Look for alternatives: open a branch closer to the big markets, or the smaller less competitive markets; can the product be sold online? Expand your market reach.
• Promotional materials are focused on the unique value proposition, new features and benefits and other product differentiation.
4. Declining Stage:
• Your product has become a commodity. Typically at this stage, competition is fierce and you can only continue to win if you are the lowest cost provider.
• Consider carefully if you wish to continue with this product if cannot compete effectively.
• Look at ways to reduce product costs.
• Look at ways to improve or change the product.
• Understand your customers and your competition very well during this stage: Develop your marketing research plan. Is market demand dying? Do your competitive intelligence and analyze your competition in business. Can your competitors be more efficient at producing the product than you? Don't hang on to the product for emotional reasons but also don't let go of the product too soon.

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Products and services move through these distinct life stages, and so do small businesses.

It is crucial for small business owners to understand the challenges of each product life cycle stage and how each stage must be handled for continued business growth and success.

Additional Reading:

Or for more on how understanding market share will help your business compete, read about Define Market Share, Part 1 and What is Market Share? Part 2.

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