The Four Stages of Product Lifecycle Management
Products have life cycles too. The product goes through different stages of its life, development, growth, maturity, and decline. The product might be a classic or a fad; they all have their days of decline when newer products outdo them. Product lifecycle management helps in understanding the different stages of products, and to take actions that will help improve its life and increase profits with time.
Companies understand that every product dies eventually, and that is the reason they invest in research and development and come up with new products. However, companies don’t let their products die entirely, more modern packaging techniques, the introduction of different flavors and such are some techniques to improve sales.
Let us now understand the different stages of Product Lifecycle Management
Product Development and Introduction: Perhaps the most expensive phase of a product’s life is its development and introduction. This stage marks the beginning of the product’s life. It might still be under research and development, but the basic model is ready. During this stage, the samples of the product are sent out, changes are made according to consumer’s demands, no promotional costs are occurred, and sales are nil. All the expenses incurred in this stage is on research, development, and sampling.
However, once the product is launched, companies invest heavily in marketing and promoting the product. The sales are low, and the market is small and fresh. From this stage, the product moves on the growth stage.
Growth: In this stage, the company starts to own profits. It comes to know how the consumer and market is appreciating the new launch and how it can still be made better. The marketing and promotional costs are still high as the new product is facing competition. The sales increase at a tremendous rate, and profit margins are high.
Maturity: During this stage of Product Lifecycle Management, the product hits stagnation. The market has accepted the product, the consumers are well aware of it, and it is available everywhere. The competition is highest during this stage as new products from other companies are being launched to keep up with the demands of consumers can be difficult. At this stage, the company needs to invest wisely in improvement and improvisation to make the product better and market it.
Decline: As the name suggests, this marks the end of a product’s market. The market slowly starts to narrow down, there are newer and better products, and the old product is unable to compete with them. The consumers no longer want to buy the same product that they own, and the sales go down tremendously. The decline is inevitable.
Apart from understanding how the Product Lifecycle Management works, it is also essential to improvise them to be able to compete and withstand the tough times.