What is the life cycle of a product?

What are some of the new and innovative products introduced to the market in your lifetime? Some examples from the last 10–15 years include the iPhone, Tesla electric cars, and Spotify, the music streaming platform. What products have become outdated? Some that come to mind are VCR players and CDs, analogue cameras, and even home desktop computers to some degree.

The product life cycle (PLC) refers to the continuous process of the course of the life of a product – from its conception to its elimination in the market space. A company can use the product life cycle to help make decisions to support expansion and growth in the marketplace.

The product life cycle (2021)

There are five stages in the product life cycle:

1. Development: This is the exploration stage before a product is launched in the marketplace. At this stage, organisations are investing heavily in developing, refining, and preparing their product for launch.
2. Introduction: This is when the product is released into the market. This is regarded as a high-stakes period in a product’s life cycle. Typically, sales are low and demand builds gradually. Clever new strategies can see this introduction phase drastically shortened before moving rapidly into the growth phase, as we saw with the Tesla Model 3.
3. Growth: At this stage, the product has found its place in the market, competition is beginning to develop and consumers are taking to the product, increasing sales. Growth is determined by various factors, including how valuable or popular a product is.
4. Maturity: At this stage, a product’s sales have tended to slow down or start to drop, signalling that the market is saturated. Companies can extract data from this stage to learn from mistakes made in the introduction and growth phases.
5. Decline: Most companies will try to keep a product in the maturity stage for as long as possible. However, there will be a point where the product declines, sales drop significantly, and customer behaviours change. Products will then be removed, replaced, or sold to another company that can use them more effectively.

Each of the five stages of the product life cycle is important, and it is vital to make the correct business moves at the correct stages. However, everyone experiences or perceives the challenges of this cycle differently. Let’s take a look at an example of how the product life cycle works in action.

Example of a product life cycle: Havaianas

Havaianas are arguably the most favoured flip-flop sandal brand worldwide. Let’s take a look at the outline of the Havaianas PLC. [1]

Development: Havaianas decided to establish a flip-flop company based on traditional flip-flops that were inspired by Japanese sandals made of wood or straw. With the company having a Brazilian heritage, they chose to make the shoes from rubber, as it was the most preferred material among their customer base.

Introduction: Havaianas delivered a strong introduction into the market with great campaigns and pre-sales with their wide customer base.

Growth: Havaianas flip-flops remained in the growth stage for most of their existence, where they eventually dominated over 90% of their market.

Maturity: Havaianas only reached maturity in the ’90s. During this stage, they launched a new product design focused on a different audience, and they spent a great amount on marketing investment.

Decline: Currently, Havaianas are still growing strong. Up to this moment, there are no signs that they may go through a decline in the short-term future.

Product management’s role in a product’s life cycle

Product managers need to know which stage of the life cycle a product is in to ensure each stage is as successful as possible by adjusting the strategy and investment around the product. You should never become complacent with a product: you should always foster innovation and continuous improvement.

The following ideas and processes can help you envision a product’s life cycle.

Craft a vision and strategy for the product

This requires research to understand the market, the customer, and the problem in question. Product managers have to compile and analyse data drawn from sources such as client feedback, quantitative data from web analytics, market statistics, and reports. Data analytics then informs the vision and the product strategy.

Start talking about the product

The success of a product is a team effort, so the product’s success is the responsibility of everybody working on its development and towards its successful launch and sales. Be it sales or the development team, everyone has to understand and be passionate about the vision for the product.

Start to build a realistic and efficient plan for your goals

A roadmap helps the various teams working on the product to get better at producing output (design, coding, or other) that is solutions-focussed, rather than problems-focussed. A well-thought-out roadmap for a product will track its progress, small achievements, and setbacks to help the team learn valuable lessons.

Continuously problem-solve during the project development

Continuously encouraging teams to problem-solve and to overcome challenges through effective time and resource management is important in keeping a product’s development and launch on track.

Get the product out to the market

Once you’re ready to go to market, you return to the initial steps where you spent a lot of time understanding how users respond to your product. Asking yourself the following questions will help you evaluate whether the product meets the market’s needs:

• Did you solve the right problem?
• Did you solve it effectively?
• Will your users be ready to pay for your product in the future?

These processes continue throughout the life cycle of a product. Once a product manager becomes more experienced with this cycle, they can work on these steps for multiple products simultaneously. Juggling between various responsibilities and working between different product strategies and tactics will eventually become the norm for an experienced product manager.

References

1. Patel N. What is the product life cycle?; Neil Patel, Blog; 2021. Available from: https://neilpatel.com/blog/product-life-cycle/