Your marketing plan should include strategies to make the most out of each stage of your product life cycle. But before you can start formulating strategies, you need a clear understanding of the product life cycle stages, how to determine what stage your product is in and how to use market research to inform your efforts throughout the life cycle. SurveyMonkey is here to help you with that.
The product life cycle is the progression of a product through five distinct stages: development, introduction, growth, maturity and decline. The concept was developed by German economist Theodore Levitt, who published his Product Life Cycle model in the Harvard Business Review in 1965. We still use this model today.
Basically, the product life cycle is the time from the product concept until its eventual withdrawal from the market. The product life cycle is used for decision-making and strategy development throughout each stage.
Marketers use the product life cycle to customise messaging for each stage, using market research to guide their efforts. Managers use the product life cycle to make strategic decisions about pricing, expansion into new markets, packaging design and more.
There are many benefits to life cycle management. Your position in the cycle impacts everything from marketing strategy to profitability.
With product life cycle management, you can:
Those who don’t adequately manage a product life cycle will encounter consequences such as:
Market research plays an integral role in each stage of the product life cycle. Use the ultimate guide to market research developed by SurveyMonkey to help you understand how research is key in managing the life cycle of your product.
Every product spends a different amount of time in each stage, so there is no definitive timeline to reference. Each stage has its own costs, risks and opportunities, and you’ll have to adapt your strategies depending on where you are in the life cycle.
The first stage in the product life cycle is development. This is where your market research journey begins. Before your product hits the marketplace, you will be refining your concept, testing your product and creating a launch strategy. Concept testing with real potential users is an important part of this step. With concept testing, you’ll know your target market’s reaction to your concept and make changes according to their feedback, before you’ve even begun to create.
During this initial phase, you’ll encounter a lot of costs without producing any income from this new product. You may be funding this stage yourself or you may be seeking investors. Either way, the risk is high and outside funding is often limited. Market development can encompass anything from a brief sketch to a prototype of your product. All you need is enough to show potential investors and customers. Validate your market potential early, so you can begin raising funds to launch.
When your product launches, you’ve entered the introduction stage of the life cycle. Your marketing team will be focused on building product awareness and reaching your target market. Typically, all content marketing and inbound marketing are based on promoting the product.
Depending on the complexity of your product, the competition, how new and innovative it is, and other factors, you may spend more time than you expected at this stage. The good news is that if your marketing is successful, you’ll move on to the next stage of growth.
Get in touch with our sales team to learn more about product optimisation after your product has been introduced to the market.
At this point in the life cycle, consumers have embraced your product and are buying into your marketing. Demand and profits are growing, and the competition is looking to interrupt your success.
Marketing in this stage moves from getting attention from consumers to establishing a brand presence. Show them why they should choose you over the competition. As your company grows, you may add new features to your product, beef up your support services and open new distribution channels. All of these efforts will feature solidly in your marketing.
When sales begin to level off from rapid growth, you’re entering the maturity stage. You may have to reduce prices to stay competitive.
Now, your marketing campaigns focus on differentiation instead of awareness, pointing out your superior product features. During this stage, production costs decline and sales are steady. It’s tempting to sit back and enjoy the steady sales, but you must make ongoing improvements to your product and let consumers know that it’s continuing to get better.
At this point, market saturation can occur. Competitors have begun taking a portion of the market. Although many consumers are using the product, there are too many competitors. The only way out of this dilemma is to focus on your strengths – differentiation, features, brand awareness, price and customer service – to become the brand of choice. If not, you’ll enter decline.
Get in touch with our sales team if your product maturity has led you to re-evaluate your pricing for price sensitivity and Van Westendorp research.
If your brand isn’t a marketplace favourite, you’ll start to experience the last stage. You’ll be facing more competition and they’ll be taking a share of the market. Sales will typically decrease in the face of rising competition.
Market decline may be related to:
If you can’t differentiate your product, you won’t be able to stand out from the crowd. Think about how the arrival of Facebook as a social media app affected the downfall of MySpace.
This may be the case if you have a product that has reached the limit of its ability and is just no longer marketable. For example, VHS tapes reached this point when DVDs came out, and DVDs are reaching this stage as more people choose streaming entertainment. Ultimately, it was a bad day for Blockbuster, which was the largest video shop in the UK.
In 2000, Heinz, the maker of food condiments and sauces, introduced EZ Squirt colourful ketchup. Initially, it was a huge success, but the novelty wore off and the product failed.
When a company sees market decline, leadership may discontinue the product, sell the company or innovate the existing product. In the meantime, your marketing may try to foster nostalgia or the superiority of your product to extend the life cycle.
Companies that are seeking new ways to grow and move out of market decline may try:
While all products go through the life cycle, some have already gone through the entire cycle and fallen by the wayside. Here are a few examples of products that are either currently in their product life cycle or have been discontinued.
Artificial intelligence (AI)
Every product moves through the stages at a different rate. There’s no hard-and-fast rule for how long a product will remain in any given stage – each one could be measured in days or years. Understanding the characteristics of each stage will help, and it’s often easier to look back and determine what stage you were just in to work out what’s next.
That understanding of what’s coming can set you up to make adjustments to extend the value of your product or delay it from moving into maturity or decline.
Use market research tools to analyse growth rate, sales trends, competition and pricing to pinpoint your current stage.
In the introduction stage, you’ll focus on positioning your product as the best, cheapest, most luxurious, or whatever benefit you’ve chosen as your focus, in the market. The strategy here is to make your product stand out from the competition and establish your brand as the expert in its industry.
Your pricing strategies will change throughout the product life cycle. Introductory pricing is about positioning yourself against the competition. During growth, pricing can fluctuate depending on adding features and benefits, availability and other factors. In maturity, competitive pricing may lead to decreases. And in decline, you’ll almost always see a decrease in price or a return to the introduction to start over again.
Your product’s performance is directly related to how you market it. Each stage in the product life cycle offers opportunities to test and refine your marketing strategy. In the introduction stage, you’ll be exploring channels, testing ads and working to connect with your target audience. The growth stage finds you using great content to connect on your chosen channels. In maturity, you may try different channels, new messaging and other ways to delay the slip into decline.
Internally, you can control your concept, positioning and marketing efforts, but there are external factors that also influence your product’s life cycle.
Are you entering a very competitive market? The competition can directly affect your product’s success. If little competition, low expenses, small market size and other barriers to entry are low, your product’s life cycle may be shortened. If these factors are higher, your entry may be more difficult but your life cycle will probably be longer.
If your product is in an industry that has fast tech advancement, such as mobile phones, tablets or computers), your product’s lifecycle will probably be quite short. To stay relevant for as long as possible, you need to understand how fast tech evolves, what changes your target market is looking for and when you need to make improvements to your product to remain competitive.
The rate at which consumers accept your product is another factor that influences life cycle. Look at life cycles of similar products to estimate what your acceptance rate might be. Market research will help you predict how quickly your product will be adopted and accepted.
The state of the economy can directly impact a product's life cycle. Let’s look at the pandemic. For the most part, people spent less or were more selective in their buying habits, extending new products’ introductory phase. A good economy can shorten the introductory phase and extend the growth phase due to increased spending. The effect of economic forces hinges on your product, target market and industry.
Regardless of what your product is, you’ll use market research throughout the life cycle to aid in the evaluation of your current market position and to aid in decision-making. Your research will increase your chances of success at every stage.
When your product is in development, your research is focused on the current market for your product, who will purchase it and why, whether the idea is viable and what kind of competition exists. SurveyMonkey has solutions for each of these types of research:
During the market introduction phase of your product’s life cycle, you’ll need to find out what advertising messages resonate with your target audience, verify any claims that you’re making about your product and obtain feedback from initial customers. This research will help you adjust for entering the growth stage.
During growth, you’ll still be monitoring customer feedback, but you’ll also want to track your brand performance for awareness, competition, public perception, reputation and more. This is also a good time to evaluate your packaging design to maximise your product’s appeal.
Keep an eye on your brand, competitors and trends to help you decide where to take your product next. Maybe your brand needs a refresh, introduction into a new market or an extension of your product line.
When your competition has grown so much that the market is saturated with products like yours, you can use our tools to help change your trajectory. Check out the size of the market, research consumer segmentation to add new markets, identify new features and look for ways to innovate on a product level.
Find out why sales for your product are dropping. SurveyMonkey can help you see if your message is still resonating with your target market, whether your products claims can be backed up, if you need new advertising or if customer feedback can pinpoint the reason for the decline.
When you’re ready to embark on your product life cycle, start with our Product Concept Analysis to test your product concepts, features and ideas. As you move through your product’s life cycle, our agile market research platform will help you make better strategic decisions and drive positive results.
Contact us today to find out more about our marketing solutions.