In a dynamic marketplace, businesses and products are born. While some grow, others die. About 52 percent of the Fortune 500 companies that existed in the past 15 years no longer exist.
Businesses and products have lifecycles. Though ancient, understanding this concept has brought stability and surging revenues to many businesses globally.
The product lifecycle describes the stages of businesses or products from the point of introduction into the market to product decline.
Understanding this concept will help your business develop a well-rounded marketing strategy to achieve success. As the product moves through these stages, you may need to refine your marketing strategies to get significant results.
In this article, we will review the product lifecycle and examine marketing strategies for each stage
Stages of the Product Lifecycle
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The product Lifecycle begins with the introduction stage where your product hits the market. At this stage, the market may be small because very few customers (early adopters) know your product.
As a result, sales are low, but you may have to increase your marketing investments. You may decide to set high prices to recoup some earlier investments in research or production. But if you want to build market share, you need to lower your prices.
Marketing at the Introduction stage
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During this stage, your efforts should gear towards establishing your product. Therefore, creating brand awareness and build consumer demand for your product should a top priority.
Also, you need a create a unified and easy way for customers to interact with your company. Advertising, direct marketing, PR, social media, sales promotions are great strategies to communicate with your potential customers.
But before that, you need to build a strong brand image. Your product quality and branding should be top-notch. If your product requires technical knowledge, provide guides and instructional resources to educate customers.
You must also employ efficient distribution channels to ensure your products reach customers who have seen your message. Offering incentives like money-back guarantees, discounts can drive product adoption.
Lastly, your customer support team must in place to address customer issues and concerns. You don’t want to face negative backlashes at this stage.
During the growth stage, the market is aware of your product. Thus, you will experience rapid growth in sales and production levels due to economies of scale. Increased sales will also attract competitors and therefore price becomes a key factor.
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Marketing at the growth stage
During the growth stage, the goal is to increase your market share. First, you should differentiate your product from your competition and achieve price stability.
You may choose to maintain product quality or add extra products or services. With this strategy, you can help customers build a brand reference. Marketing communications is essential.
Research your customers, know the channels they use and interact with them. Your promotional activities should increase and outline product benefits over your competitor products. Your marketing campaigns should be tailored to reach wider audiences. And Increasing your distribution channels will further enable your customers to access your products.
During the maturity stage, the market becomes saturated. Because many competitors have entered the market, therefore, your profit may decline.
Your goal will be to maximize profit and maintain market share. To achieve profitability, you can introduce new product features or increase marketing efforts. Also, you must benchmark your prices with your competitors.
Marketing at Maturity Stage
During this stage, competition becomes fierce. You may need to research new markets and trends to create new product features or variations. Think of innovative features that will match their lifestyle and make you stand out among competitors.
Use effective marketing and communication channels to reach and stay in touch with your customers. As you find new audiences to use your product, also engage existing customers. Nurture and maintain strong customer relationships. Likewise, creating personalized and customized products and services will help retain clients and build loyalty.
Loyalty programs including rewards, incentives, sales discounts will help you build customer loyalty. Advertising, direct marketing, PR, social media and sales promotions are critical tactics for this phase.
Lastly, you need to strengthen partnerships with your distributors to achieve results. Your distributors are your clients and offering incentives and product supports can convert them to ambassadors.
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At the decline stage, the market is heavily saturated. Sales may drop because customers have switched to other products or they have all purchased your products. Typewriter, telegrams are typical examples of a product that have declined.
Your product may either continue to decline and eventually cease to exist. Or begin a new product lifecycle by making innovative product changes and updates.
Marketing at Decline stage
During this stage, marketing should focus on advertising and promotional efforts to maintain existing customers. You may either reduce production costs by introducing economy packs or producing for smaller market segments.
Adopting selective product distribution will help you further reduce costs.
Product decline doesn’t always signify the end. Market research and development can help you transition your business into new products and new markets.
Final Thoughts: Product Lifecycle Marketing
Marketplaces are constantly evolving. Understanding your product lifecycle will help you tailor your marketing strategy to achieve business success. Whether you are offering products or services or both, you need to evaluate your product lifecycle.
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