For many of us, marketing is as much an art form as it is science. If you need input concerning the scientific part of marketing, then the product life cycle is a good place to start. It shows, generally, when chances are highest for a specific initiative to give the best results.
As the name implies, the method describes your product’s life cycle. Just as you pass through childhood, youth, adulthood and old age, your product goes through something similar. In the model the four stages of the product are called:
The four phases are characterized by:
The product is introduced on the market
High marketing effort required to create knowledge of the product
Few customers, low sales
Expenses are higher than income
Product sales rise rapidly
More competitors intervene
High marketing effort, primarily aimed at differentiating the product from the products of the emerging competition
Spreading the message to more potential customers
The product is established on the market
Lower production costs and lower prices
The product can remain in this phase for a long time
Development of new products to complement or replace the mature product
The market is saturated, market shares only relocate slightly
Investments are minimized
The product is shut down when it's no longer profitable
As shown above the maturation phase is most profitable phase. This is where companies attempt to earn back what has been spent on development and marketing of the product. Therefore, it is only logical that companies are interested in prolonging the maturation phase.
Mind Tools describes four strategies that are typically used for prolonging the maturation phase.
Convince your customers to use the product more frequently
Expand or update the characteristics of the product
Use discount- or sales campaigns to attract customers who use another brand
Create an advertising campaign with samples in order to attract customers who doesn't use this type of product.
Even though the theory has gained wide acceptance in the world of marketing, it still has critics who claim that there are so many exceptions and so few rules that it makes no sense. Some of the points of critique are:
There's no permanent interval for a product to remain in each phase. Each product is different and moves through the four phases at different times.
There's no evidence that all products must die eventually. Some products move from maturation back to growth due to an improvement or redesign. Some believe that it becomes a self-fulfilling prophecy when we say that a product must reach the decline phase.
Theories focus on individual products instead of taking larger brands into account.
The theory does not take a products redesign or reinvention into account.