Constantly evolving technology and changing consumer tastes mean today’s companies must be better than ever at developing new products and managing established ones. Understanding the various stages through which products typically pass is key to ensuring your product’s longevity.
Enter: the product life cycle.
What is the product life cycle, or PLC? Think of your product as a living, breathing organism. Like other organisms, it transitions through various life cycle stages. From conception to demise, each stage of the product life cycle is characterized by new challenges and opportunities. Each stage also serves as a strategic tool for companies to understand their product better, enabling them to plan for new product development, set product price, and refine product positioning.
At Remesh, we're particular experts in product development and concept testing. But in this article, we'll cover all of the product life cycle stages.
There are five distinct stages within the product life cycle: development, introduction, growth, maturity, and decline.
This first life cycle stage (product development) encompasses everything leading up to the product’s launch, from ideation to building and refining the product. This phase is characterized by rigorous research and development and, depending on the product, can last for years.
Many products never make it past this stage, but products with strong product-market fit have the best chances for success and reaching the maturity phase.
Throughout the research and development stage, costs accumulate during a period of zero sales and teams can face difficulty off-setting the negative cash flow. A common strategy used to move through this phase efficiently is to prepare a minimum viable product for launch and improve the product throughout the rest of the life cycle – although this move is risky, it's the more agile approach that may shorten a product development process and escalate time to profit.
Now that your product is through the initial development process, it’s ready for the next life cycle stages – introduction to the market.
The introduction stage is all about building brand awareness through various marketing efforts and advertising, perhaps like a concentration on distribution channels or reception. Design will play an
important role here. Visual details such as a unique color palette tied to the brand emotions or tailored fonts aid in brand recognition and recall. This recall is critical in creating the initial buzz for a brand. Products that don’t generate enough buzz or drum up strong enthusiasm risk failing in the market.
According to Nielsen, one of the top three reasons more than 80% of new consumer products fail in-market is insufficient marketing strategy support.
Although this stage of the product life cycle is generally fueled by excitement, it's also the most expensive stage. Because the market share and space for a new product is small, sales are low in this stage. However, costs can be reduced here with thorough and agile market research, or by expediting an innovation cycle to more quickly reach the maturity phase.
Depending on its success after entering the market, your product may now be in the much anticipated growth stage. Products in this stage have met the market need and have been well received by customers. As sales and profits increase, companies can invest more resources into building brand awareness and increasing market share.
If your product exists in the CPG industry, for example, retailers are likely more willing to stock your product during the growth stage. In the auto industry, brands like Tesla are a great example of growth stage products, which exist broadly as a consumable product in minds of customers, although there is some resistance to the new technology (electric instead of fuel) that requires further adoption.
The growth phase of the product life cycle is essential for organizations that need to beat past sales on an iterative basis to become profitable. This growth stage is also when organizations invest in better consumer support, and can collect customer feedback in a formalized process.
It's important to watch this stage of the product life cycle closely, as the decline stage can pre-empt product maturity in some cases.
In the maturity stage, company goals shift from building market share to maintaining it - although the previous stage is known as the growth phase, that does not mean a product stops growing when it reaches the maturity phase.
At this point, the product is well established and things like distribution channels are solidified and optimized. Brand awareness is strong and the volume of sales is at an all time high. However, this means that competitors are more aware of your product than ever before. Increased competition means companies must differentiate and diversify in the maturity stage.
To maintain a product growth phase synchronously with maturity, product life cycle management is essential. At this phase, you might consider dedicating specialists or full teams to the success of the product, or adopt more agile product management frameworks as your needs change.
Remember, successful product innovation can mean the difference between remaining in this stage or progressing to the final stage of the PLC.
In the fifth and final stage of the product life cycle (the decline phase), revenue decreases as a result of increased competition, innovation, and changes in consumer behavior. Unlike revenue decreases in down cycles, which are a result of seasonal factors, revenue in the decline stage is a function of decreasing market share. At this stage, companies may consider rebranding the product for a different use, “harvesting” the product, or terminating production altogether. It may be wise to revisit successes in the maturity phase and attempt to extend that portion of the product life cycle as long as possible.
In some cases, saturation pre-dates the market decline stage and can be considered its own phase.
It’s important to remember that the product lifecycle management is not a strict sentencing. It’s a framework—a way to think about your product over time and plan for its future.
Keep in mind that many products and services have been around for generations and have never reached the decline stage. Look to “blue chip” companies which consistently outperform themselves, like Disney, IBM, and Intel. As a product team, your goal should be to extend the product life cycle and reach this legacy status.
Because the product life cycle is fluid and flexible, each stage should be closely monitored.
Maybe aspects of your product lag behind your competition, or maybe years on the market have rendered your product stale. Whatever the reason for your product’s decline stage, it may be time to switch it up. Brand innovation is a consumer selling point. That means new product features and services can enable you to meet the dynamic needs of your customers, challenge your competition, and revitalize your brand.
Take, for example, Instagram Stories.
Adding a new feature that allows users to share content that disappears after 24 hours changed the social media company’s game. By adding Stories, Instagram met their customers’ desire to post more informal content, challenged their main competitor Snapchat, and addressed the toxic culture associated with the brand. In a single move toward ephemeral content, Instagram became the place to share the everyday moments in between the “Insta-worthy” ones.
Packaging is powerful.
It’s the first point of contact between consumers and brands, and the last differentiator between comparable products. Packaging can make the difference between a product being considered basic and cheap, or luxurious and chic. In fact, one study from Ipsos found that purchasing decisions for most American consumers are influenced by the design and material of product packaging.
Anyone who’s ever needed scissors to open a package of scissors knows that packaging can also be a pain. Changing your product’s packaging to ease usage is a great way to bring new life to tired products.
After years of product development and concept testing, for example, Tide invented the Tide Pod, which radically transformed the laundry process. Consumers raved about the ease and convenience of the product, and laundry was never the same again.
Packaging is also important for developing brand identity - and even brands with global recognition can benefit from shaking up their packaging. Coca-Cola, for example, replaced their iconic logo with first names and colloquial nicknames in one successful re-packaging campaign. The idea itself led to an increase in sales by more than 2%.
You’ve just discovered limitations in your product’s original target market. Whether the market has become saturated over time or an unexpected downturn in the industry has put your company in a precarious position, there’s no need to fear. The globalized world is better suited now than ever before for expansion into new markets – that is, if you can ensure the right distribution channels.
Broadening your product’s reach, however, isn’t the only way to go about identifying new markets. Sometimes, developing a market that is more niche can have equally impactful results.
Take our new market exploration case study with a global CPG brand, for example. The brand set out to determine whether customers would purchase a premium laundry detergent solution in a price-sensitive market navigated by practical, need-based buyers. The market was new for the brand, but they knew that the there might be interest in the untapped market.
Using Remesh, the brand collected insights into the needs and preferences of that consumer market and shaved months off what would have been a more traditional research process with a difficult to reach audience.
Identifying new markets for your product is a powerful tactical move because it plays offense and defense at the same time. On the offense, you’re unlocking new revenue streams and gaining an edge on your competition. On the defense, you’re protecting yourself from industry shifts by diversifying your offer.
Not only can a creative advertising campaign do wonders for rejuvenating your product’s image—it can also make a real impact on product sales. One Harvard Business Review study found that investments in highly creative advertising campaigns had nearly double the sales impact of investments in more conservative approaches.
Take for example Old Spice’s wildly popular advertising campaign, “Smell Like A Man, Man.” Old Spice’s claim to fame—that it’s been selling men’s grooming products since the early 1900s—later surfaced as a major vulnerability. People associated the classic Old Spice scent with their grandfathers, and the last thing young men wanted was to smell “old.” With new, younger products like Axe gaining popularity, Old Spice needed a fresh face to represent their brand.
The “Smell Like A Man, Man” campaign gave Old Spice exactly that. A short, punchy commercial featuring former NFL wide receiver Isaiah Mustafa as the eponymous “Man Your Man Could Smell Like” single handedly brought this iconic American brand into the 21st-century. The impact was huge: a 300% increase in traffic to the company’s website, a Primetime Emmy Award, and a dramatic influence on sales.
The key to making the most of these strategies is to align them with your customers, and to ensure the right digital distribution channels (not just supply chains) are being leveraged to connect with your audience. Use iterative development techniques to make sure new initiatives resonate with the needs and preferences of customers.
Consumer expectations are evolving at a breakneck pace and product teams must evolve with them. Finding ways to stretch your product’s lifespan is critical in this climate of shrinking PLCs. Use these strategies independently and in combination with others to get ahead of your competition and ensure your product’s continual success.
Ready to iterate and learn throughout your product's life cycle? Stay organized with our Phase-Gate Model checklist and optimize your product development process.