Chapter 6: Product Development
The Product Life Cycle
In the world of products, just like anything that lives, there’s a life cycle. From its introduction into the market to its eventual decline, a product goes through different stages, each with its unique characteristics and marketing implications. We refer to this progression as the Product Life Cycle (PLC).
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Let's unwrap the PLC by delving into its four primary stages:
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Introduction Stage:
This is the product’s debut on the market stage. Sales are generally slow at this time, as the market is just becoming aware of the product. Think of this as the "new kid on the block" phase. Marketing efforts are high, as it's crucial to build product awareness and interest. Costs often outweigh revenues, making this a critical stage for sustained investment.
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Remember when Apple first introduced the iPad in 2010? It was a novel device category, and while there was intrigue, the market was just becoming accustomed to the concept of a tablet.
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Growth Stage:
As the name suggests, this is when sales start to grow rapidly. The market has not only accepted the product, but there's also a burgeoning demand for it. Profits rise during this phase as awareness translates to sales, and economies of scale play a favorable role in balancing costs. Marketers need to focus on brand preference and loyalty in this stage.
Netflix's rise in the late 2010s can serve as a guide here. Streaming started gaining momentum, subscriptions surged, and the brand became synonymous with online entertainment.
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Maturity Stage:
The growth spurt slows down, and sales plateau. By this time, the market is saturated, competition is fierce, and most of the target audience is already familiar with the product. Marketers need to get creative to ensure their product remains appealing and differentiated from competitors. This might mean adding new features or venturing into new markets.
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Coca-Cola is a great case study. To keep the momentum alive in saturated markets, they've introduced flavors and sizes and even ventured into diverse beverage categories.
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Decline Stage:
The sun starts setting on the product's life. Sales and profits decrease. This could be due to newer technologies, changing consumer preferences, or superior competing products. Companies need to decide if they want to rejuvenate the product or let it phase out.
Consider the humble typewriter. With the dawn of personal computers and word processors, it slowly receded from the mainstream.
In understanding the PLC, it's essential to remember that not all products follow this sequence rigidly. Some innovations might jump stages or have elongated phases. The PLC is a tool, a conceptual framework that helps businesses strategize their marketing decisions based on where their product currently stands in its life journey.
