Product Life Cycle Stages and Strategies

The Degree of Product Acceptance

by the market over time. 'An attempt to recognize distinct stages in sales history of the product' during its life span (Kotler). Evolution of the sales and benefits from the product's launch until its recall. The duration of each stage isn't identical; they can be lengthened, repeated or not even produced at all. Classic stages are:

• Introduction:
• Uncertainty stage.
• The organization risks in choosing the marketing mix variables (4Ps+).
• Higher costs. Limited benefits. Lower sales.
• Basic versions of the product.
• Performances:
  • Attract innovators
  • Activate demand
  • Modifications in products to adapt to what demand wants/needs
• Courses of action:
  • Prestige strategy, higher prices, exclusive or selective distribution, good communication campaign (margin)
  • Rapid market penetration to gain market share, lower prices, great distribution, communication and promotion efforts (rotation)

• Growth:
• Strong growth in sales and profits.
• Consolidation of the product (early adopters).
• New competitors.
• New versions and modes of the basic product.
• Economies of scale in production: lower prices.
• Intensive distribution. Profit margins.
• Communication brand preference and loyalty.
• Strategy:
  • Improve the product's quality or attributes to obtain a better value to differentiate from its competitors.
  • Penetration in new market segments. Invest in communication.

• Maturity:
• Established sales and benefits. Maintain market share.
• Higher competition: weakest competitors abandon the market.
• Interest in finding market niches.
• Lower prices because of competitors.
• Communication: Differentiate the product.
• Distribution: Stable, higher margins for intermediaries. It's possible to differentiate through alternative distribution channels.
• Solutions are sought to extend the life of the product.
• Defend market share while maximizing profit.

• Decline:
• The market for a product will start to shrink.
• Saturated market or consumers switching to different products.
• Abandon or replace the product.
• Profit decreases and sometimes disappears.
• Options:
  • Specialize in profitable segments to become leader in these niches, with selective distribution and reminder communication –minimum intensity-.
  • Rejuvenate the product.
  • Remove the product from the company's portfolio.