A new product will be aimed at facing a life cycle that, depending on good positioning strategies, will know if it will be durable or on the contrary, its journey will be very limited
When talking about the product concept, we should not overlook an extremely important aspect, which is its life cycle. And just as all human beings go through different stages in our lives, a product also does; Next, we will explain these different phases and their main characteristics.
LIFE CYCLE OF A PRODUCT
Five stages have been determined which, depending on the product, can have different shape and duration:
Development: this is where a company has the idea of developing a new product (an article that you could see in previous deliveries) and therefore there are no sales and the costs that a company invests at this stage are high.
Introduction: Refers to when a new product is first launched. Something similar to when we stepped on what was to be our university for the first time or when we visited the dentist and did our first check-up.
This stage takes time and the sales of a product register a slow movement resulting in negative or almost zero profits, since a lot of money has also been spent in the distribution and promotion of the product when wanting to publicize it.
At this stage, a company can determine what strategy to follow regarding pricing and promotion. If you want to quickly recover your investment, you can sell your product at a high price and with little promotion, however, your market will be limited to high-income consumers; Or you can do the opposite (high promotion and low price) where your market penetration will be faster and you will have a greater participation, which will serve you in the future to balance your level of expenses and profits.
Growth: If we get our new university on the right foot and make every effort to demonstrate that we want to advance our career, without a doubt we will grow both intellectually and personally. Likewise, a product that has been put on the market, at this stage will increase its sales as it is quickly acquired by the first consumers and by others who want to follow the pioneers, logically, hearing good comments about the good.
Being in this cover, a company faces the emergence of new competitors, which will lead to greater distribution, lower prices, and an improvement in the quality, characteristics and models of the product. It will also be possible to enter new market segments and all this will cause, as we said before, a rapid increase in sales and great profit.
Maturity: At this point, sales growth reaches its peak and profits stagnate or tend to decline. It is here that the marketing management of a company finds a great challenge, since it must always satisfy the changing interests and tastes of consumers. You can think about modifying the market, the product or the marketing mix.
If you want to change the market, the idea is to increase the consumption of the product looking for new users and segments. If what you want to do is modify the product, you can improve its quality, characteristics or style, making it more attractive to consumers. Finally, if the idea is to change the marketing mix, the company could try to make adjustments or improvements to any of the 4 P's.
Declination: Like everything in life, there is always an end. Here sales reach a fatal level (zero), as the company is not able to face the new challenges that have been created (increased competition, technological advances, changes in consumer tastes, etc.).
Each stage represents for a company, new risks as well as new opportunities
Therefore, those products that are no longer in high demand should be identified and a decision should be made about them. They can be kept, waiting for some change in terms of competition (market abandonment), repositioned, taking the product back to the growth stage or withdrawing it definitively when noticing that there is no longer any salvation.
The cycle: Development, Introduction, Growth, Maturity, Declination
As we could see, each product has a life cycle marked by multiple opportunities, risks and decisions; It is the job of each company to identify how it is going to act at each stage, in order to bring out a new product and try by all means to avoid falling into the last one since, like all human beings, in the end only some will be saved…
