Product Life Cycle Stages and Strategies
The circle of life is not a cycle that only exists for living creatures, it also exists for products as well. Markets generally refer to 5 stages in a product’s life cycle: product development, introduction, growth, maturity, and decline. Throughout all of these stages the sales and profits of a given product have a general pattern that may be expected. As seen, profits are highest during the growth and maturity stages while sales are highest during the maturity stage.
An industry, in my opinion, that deals with product life cycle strategies most often is the technology industry, and to bring up Apple again, Apple has the concept of a products life cycle and how to strategically use it to benefit the company.
When Apple releases a new phone they always introduce it at a high price. Before introducing it; however, Apple must spend time, energy, and money deciding what changes to make in their new product. With the hype around the phone stirring Apple earns max profits by charging a large amount at the introduction stage, but the price starts to decline with the growth stage and plateaus though its maturity stage when it finds its place in the market. As rumors start spreading about a new upgraded phone, sales begin and prices drop even further until the new product is introduced at another high price. This cycle continues until the first phone has no purpose, and can’t even be sold in stores due to its old technology. The same idea can be seen with the new gaming systems X-Box 1 and PS4.
On top of this idea, products can also pass through society as a style, fashion or fad (Kotler & Armstrong, 2012). While styles and fashions may last over a longer amount of time than fads to, fads may produce more profits in a shorter amount of time. A marketers job is to recognize fads as quickly as possible and produce a cheap product to satisfy this fad and come up on as much profit as possible.