The Product Life Cycle describes the stages of a product from launch to being discontinued. It is a strategy tool that helps companies plan for new product development and refine existing products.
Download our Free Resource – Essential marketing models
With so many marketing models to choose from, it can be difficult to know which is the best to use in a specific situation. This free guide has been created to help today’s marketers apply our pick of the most popular established frameworks to aid their decision making.
Access the Essential marketing models
The new product development stage occurs before the product’s life-cycle begins, consisting of market research leading up to product launch. Hence this stage can include:
The four stages are shown in the table below, although decline can be avoided by reinventing elements of the product. It is also recognized that some products never move beyond the introduction phase whilst others move through the life cycle much faster than others.
Product marketing managers must introduce their new product while it’s relatively unknown and production is small. The price is often higher as distribution is limited and promotion is personalized.
At this point, it is worth returning to the infamous statistic that 95% of new products fail. So planning is key. We recommend planning your new product launch using the RACE planning framework.
Our Business Members’ Product launch playbook defines the types of communications, best practices and optimization techniques that should be used across the RACE planning framework to maximize your customers’ and products’ lifetime values.
Congratulations – popularity for your product is growing! As your market share increases, now is the time to focus your RACE objectives on market penetration and development – such as communicating product benefits and building the brand.
Since your product is being bought in greater numbers and, with volume, the price is declining and profits increase. When upscaling any business, bear in mind the practical implications for resource, sumarized by Lilach Bullock in her blog blog 4 essential elements of a scalable business:
Scale too quickly and you can suffer from not being prepared. Scale slowly or unevenly and you may get stuck with employees you hired that you don’t need anymore. Overall, you need to ensure that the rate of your growth doesn’t hurt you in the long run.
You can find more growth-related blogs and resources, including Lilach’s full blog on our dedicated campaign page, Grow your business and professional marketing skills.
The product competes with alternatives and its pricing drops. Distribution becomes intense (it’s available everywhere) and promotion focuses on the differences to competitors’ products.
When managing differentiation strategy, DRIP is another marketing model featured in our essential marketing models guide. DRIP is an acronym for differentiate, reinforce, inform and persuade.
Reaching the end of its life, the product faces fewer competitors. The price may rise and distribution has become selective as some distributors have dropped the product. Promotion aims to remind customers of its existence.
Download our Free Resource – Essential marketing models
In our free, illustrated guide to 15 classic planning models diagrams we explain what they are and give examples of why and how to apply them in business.
Access the Essential marketing models
When reviewing your business you need to understand which stage your products or services have reached across your portfolio of all products which can be assessed in terms of market share and growth using the BCG matrix model. Reviewing the product of portfolio enables marketers to plan for new products, reinvent existing products or discontinue products that are in serious decline.
You can also relate digital marketing products and services to the popular diffusion of innovation model hype cycles.
This example shows how the yoghurt product category has moved through the product life cycle by remixing elements of the marketing mix. Examples of stages and how PLC evolved are:
Introduction
Growth
Maturity
Decline
There are several strategies you can use to attempt to extend the life cycle of your product and stave off decline without radically changing your product.
The structure of your advertising and physical appearance of your product should always be considered. Who is it targeting? How do you refer to the product? Tweaking your messages and packaging and aiming them at different demographics can reinvigorate your product or brand. One of the best examples of this is Dollar Shave Club’s video ad that presented its grooming product delivery service in a new, humorous light. To date, the video has nearly 30 million views and sparked 12,000 orders in the two days following their video being posted.
You can also assess your product features and the price point they’re being offered at. You can then choose to either lower your price for the same product, in an attempt to prolong its appeal by increasing its sense of value, or you can add new features the product to re-energize its place in your industry. A common example of this is the many iterations of laptops you see released by a brand. Large changes are marked by new product names (e.g. Lenovo YOGA laptops) while spec upgrades are labelled ‘generations’. The more generations of a product, the cheaper older generations become as they are seen as ‘value’ options.
A tip is to review customer feedback continuously, to ensure your products don’t reach the end of their shelf life, carry out regular customer surveys. Get feedback and find out what works, what doesn’t and why.
To maximize your product’s longevity, you should always explore possibilities of launching your product in new markets or on new platforms. Netflix transformed itself from a DVD delivery service into one of the largest video streaming platforms in the world. Launching its streaming service in the US in 2007, it started to expand into other markets with Canada in 2010, then South American countries such as Brazil, Argentina, and Paraguay. Popularity continued to grow, and Netflix expanded into Europe in 2012. Today they boast 167 million subscribers.
As technology evolves, so do the platforms you have available for your products. If you find ways for your products to remain flexible in their distribution, you can prolong their life-cycle for years.
Nintendo has been at the forefront of extending the lifespan of their games by continuously utilizing the changing platforms and technology available to them. Several games originally launched in the 1980s and available on cartridges have been re-released multiple times to extend their lifespan:
If product sales are declining, you need to know why. Products move into decline due to improved offers from competitors, changes in behaviour or because there is no longer a need for the product. For example, across Morocco, there are long-established ‘Ecrivains Publics’ or people who read your mail and write the responses. If the literacy levels in the country continue to improve (currently around 70%, from 60% ten years ago) this service will move into rapid decline. The Ecrivians will need to develop their value proposition, or expand their market.
Moreover, product marketing managers need to stay up to date with the latest sector innovations in order to evolve their product’s lifecycle and avoid decline. Resources like our Marketing technology and media innovation guide and Financial services marketing trends guide and others in our sector technology innovation toolkit will enable you to review developments in your sector and make insight-driven decisions.
[ad_2]
Source link
Digital Strategy Consultants (DSC) © 2019 - 2024 All Rights Reserved|About Us|Privacy Policy
