Product Life Cycle (With Real World Examples) | Strategic Management | From A Business Professor
Summary
TLDRThis video from 'Business School 101' explores the product life cycle, a critical concept for business professionals. It outlines the four stages: Introduction, Growth, Maturity, and Decline, detailing strategies for each phase. Examples like typewriters, VCRs, electric vehicles, and AI products illustrate these stages. The video also offers strategies to extend the maturity phase, emphasizing the importance of industry evolution, consumer tracking, innovative technology, and consumer perception in sustaining product success.
Takeaways
- 🔍 The product life cycle is a critical concept in business, outlining the stages a product goes through from introduction to removal from the market.
- 📈 The four main stages of the product life cycle are Introduction, Growth, Maturity, and Decline, each with distinct characteristics and strategies.
- 🚀 During the Introduction stage, products face slow sales as they create demand and compete with established products in the market.
- 🌱 The Growth stage sees an increase in production and sales as the product becomes more widely available and faces competition from new entrants.
- 🏆 In the Maturity stage, sales growth slows as the market becomes saturated, and maintaining market share becomes a focus through branding and product differentiation.
- 📉 The Decline stage is marked by a decrease in sales due to increased competition or the emergence of innovative alternatives that make the product obsolete.
- 💡 Examples of products in various stages include typewriters in decline, desktop computers and smartphones in growth or maturity, and electric vehicles still growing.
- 🔄 To maintain the Maturity stage, businesses should understand industry evolution, track consumer changes, use innovative technology, and consider consumer perceptions.
- 📊 Adapting to industry changes and consumer needs is crucial for prolonging the life cycle, as it allows businesses to stay relevant and competitive.
- 💼 The script suggests that even though all products have a life cycle, successful strategies can extend the Maturity stage, delaying the eventual decline.
Q & A
What is the product life cycle?
-The product life cycle refers to the length of time a product is introduced to consumers into the market until it's removed from the shelves.
How many stages are included in the product life cycle?
-The product life cycle is typically divided into four major stages: introduction, growth, maturity, and decline.
What happens during the introduction stage of a product life cycle?
-During the introduction stage, a new product is produced and a market strategy is developed to create consumer awareness. Sales are typically slow as demand needs to be established.
What are the key characteristics of the growth stage in a product's life cycle?
-In the growth stage, demand for the product increases, leading to higher production and wider availability. Sales growth becomes more significant, and competition may emerge.
Why does the sales growth slow down during the maturity stage of a product life cycle?
-Sales growth slows down during the maturity stage because the market becomes largely saturated, and the product is well established with most consumers having already purchased it.
How does the decline stage of a product life cycle occur?
-The decline stage occurs due to increased competition, innovations that make the existing product obsolete, or a shift in consumer preferences towards new alternatives.
What are some real-world examples of products in different stages of the product life cycle?
-Examples include typewriters in the decline stage, desktop computers and smartphones in the growth or maturity stages, and electric vehicles still in the growth stage.
How can a company maintain the mature stage of a product life cycle for a longer period?
-A company can maintain the mature stage by understanding industry evolution, tracking consumer changes, using innovative technology, and considering consumer perceptions.
Why is it important for a business to understand the evolution in its industry?
-Understanding industry evolution helps a business to reflect those changes, maximize profits, and stay current, which is crucial for adapting to technological advancements and generational shifts.
How can a company adapt to changing consumer needs and preferences?
-A company can adapt by regularly refining its approach to meet the expectations of each new generation, such as altering product features or marketing strategies to align with consumer interests.
What role does innovative technology play in prolonging the life cycle of a product?
-Innovative technology can alter business operations and help firms remain competitive by differentiating themselves from competitors, which can lead to increased sales and stronger consumer connections.
Why is rebranding important for a company as it navigates through the product life cycle stages?
-Rebranding helps a company maintain a positive public standing by aligning its marketing strategies with the changing interests and values of its target audience, such as shifting focus to environmental sustainability.
Outlines
📈 Understanding the Product Life Cycle
This paragraph introduces the concept of the product life cycle, which is a critical business tool used to understand the stages a product goes through from its introduction to the market until it's eventually removed. The life cycle is divided into four stages: Introduction, Growth, Maturity, and Decline. During the Introduction stage, products are new to the market, and sales are typically slow as demand is built. The Growth stage sees an increase in demand and production. Maturity is characterized by slower sales growth due to market saturation. Finally, the Decline stage is marked by a decrease in sales as competition rises or innovations make the product obsolete. The paragraph also poses questions about the number of stages, real-world examples, and strategies to maintain the Maturity stage.
🚀 Strategies for Prolonging the Product Life Cycle
This paragraph delves into strategies businesses can employ to extend the Maturity stage of their products, thereby delaying the Decline stage. It emphasizes the importance of understanding industry evolution, tracking consumer changes, utilizing innovative technology, and considering consumer perceptions. By staying informed about industry trends, adapting to the evolving needs of consumers, incorporating new technologies, and aligning with consumer values, companies can maintain their market position and profitability. Examples include the transition in the advertising industry from traditional media to social media and the need for companies to innovate and rebrand to meet the changing interests and values of their target audience.
Mindmap
Keywords
💡Product Life Cycle
💡Introduction Stage
💡Growth Stage
💡Maturity Stage
💡Decline Stage
💡Branding
💡Competition
💡Innovation
💡Market Saturation
💡Rebranding
💡Technological Advancements
Highlights
The product life cycle is a critical concept in business, guiding decisions on advertising, pricing, market expansion, and packaging redesign.
A product life cycle consists of four stages: introduction, growth, maturity, and decline.
Introduction stage involves creating market awareness for a new product, often with slow sales as demand is built.
Most products fail during the introduction stage, never reaching subsequent stages of the life cycle.
The growth stage is marked by increased demand, production, and market availability.
Branding becomes crucial in the growth stage to compete with potential market entrants.
Maturity stage indicates a saturated market with slowed sales growth and well-established products.
In maturity, branding, pricing, and product differentiation are key to maintaining market share.
Decline stage is characterized by rising competition and innovations that make the product obsolete.
Typewriters exemplify a product that has reached the end of its life cycle with few sales and demand.
VCRs, once popular, are now obsolete due to the rise of DVDs and streaming services.
Electric vehicles are in the growth stage, with continuous innovation and increasing sales.
AI products are still in the introduction stage, with developments like autonomous vehicles yet to be widely adopted.
Understanding industry evolution can help prolong the mature stage of a product's life cycle.
Tracking consumer changes is essential to meet the evolving expectations of different generations.
Innovative technology can give businesses a competitive edge and help differentiate their products.
Consumer perceptions and interests can influence a brand's reputation, necessitating rebranding at different life cycle stages.
Prolonging the mature stage of a product's life cycle involves adapting to industry changes, consumer evolution, and technological advancements.
Transcripts
hello everyone welcome to business
school 101 the term product life cycle
refers to the length of time a product
is introduced to consumers into the
market until it's removed from the
shelves as one of the most important
concepts in the business area it is
widely used by business professionals as
a factor in deciding when it is
appropriate to increase advertising
reduce prices expand to new markets or
redesign packaging so how many stages
are included in the product life cycle
are there some real world examples how
to maintain the mature stage for a long
time
in this video i will discuss these
questions with you
section one the four stages of the
product life cycle
the life cycle of a product is often
broken into four major stages
introduction growth maturity and decline
so let's discuss them individually
stage one introduction this introduction
stage involves producing a new product
and developing a market strategy to make
consumers aware of the product and its
benefits at this stage sales tend to be
slow as demand needs to be created this
stage can take time to move through
depending on the complexity of the
product how new and innovative it is how
it suits customer needs and whether
there is any competition in the
marketplace please keep in mind that
although a new product development that
is suited to customer needs is more
likely to succeed in the real business
world most products fail at this stage
meaning that stage 2 is never reached
stage 2 growth if a product successfully
navigates through the introduction stage
it is ready to enter the growth stage of
the life cycle this should see growing
demand promote an increase in production
and the product become more widely
available the steady sales growth of the
introduction stage now turns into a
sharp upturn as the product takes off at
this point competitors may enter the
market with their own versions of the
new product either direct copies or with
some improvements branding becomes
important to maintain the company's
position in the marketplace as the
consumer is given a choice to go
elsewhere product pricing and
availability in the marketplace also
become critical factors to continue
driving sales in the face of increasing
competition
stage three maturity when a product
reaches maturity its sales growth tends
to slow down signaling a largely
saturated market at this point the
product is well established and the cost
of producing and marketing the existing
product will decline as the product life
cycle reaches this mature stage most
consumers now have already bought the
product and competitors have already
been established meaning that branding
price and product differentiation
becomes even more important to maintain
a market share retailers will not seek
to promote your product as they may have
done in stage one but will instead
become stockists and order takers
stage four decline eventually as
competition continues to rise with other
companies seeking to emulate your
success with additional product features
or lower prices so the life cycle will
go into decline the decline can also be
caused by innovations that supersede the
existing product such as horse drawn
carriages going out of fashion as the
automobile took over at this point many
companies will begin to move on to
different ventures because the product
is no longer lucrative of course some
companies will survive the decline and
may continue to offer the product but
production is likely to be on a smaller
scale and prices and profit margins may
become depressed consumers may also turn
away from old products and in favor of
new alternatives
section 2 examples here are a few
well-known examples of products that
have passed or are passing through the
product life cycle
first typewriters the typewriter was
hugely popular following its
introduction in the late 19th century
due to the way it made writing easier
and more efficient quickly moving
through market growth to maturity the
typewriter began to go into decline with
the advent of the electronic word
processor and then computers laptops and
smartphones while there are still
typewriters available the product is now
at the end of its decline phase with few
sales and little demand meanwhile
desktop computers laptops smartphones
and tablets are all experiencing the
growth or maturity phases of the product
life cycle
second video cassette recorders vcrs
having first appeared as a relatively
expensive product vcrs experienced
large-scale product growth as prices
reduced leading to market maturation
when they could be found in many homes
however with the creation of dvds and
then more recently streaming services
vcrs are now effectively obsolete once a
groundbreaking product vcrs are now deep
in the decline stage from which it seems
unlikely they will ever recover
third electric vehicles electric
vehicles are experiencing a growth stage
in their product life cycle as companies
work to push them into the marketplace
with continued design improvements
although electric vehicles are not new
the consistent innovation and the fast
growing sales mean that they are still
growing and not yet into the mature
phase
fourth ai products like electric
vehicles artificial intelligence ai has
been in development and used for years
but due to the continued developments in
ai many products are still in the market
introduction stage of the product life
cycle these include innovations that are
still being developed such as autonomous
vehicles which are yet to be adopted by
consumers
section three maintain the mature stage
while all products have their life
cycles many of the most successful ones
can maintain the mature stage of the
life cycle for many years before any
eventual decline if a company would like
to prolong the life cycle of its
products here are a few strategies
number one
understand evolution in the industry
your industry changes the same way your
product does as you undergo the life
cycle stages it might be helpful to
reflect those changes in your business
to maximize profits and stay current the
first step is to remain informed about
the industry's evolution for example in
the advertising industry professionals
transition from promoting products and
services on the radio and in newspapers
to using social media advertisements and
email marketing to engage consumers
changes in technology and differing
priorities from generation to generation
can alter the way operate a business
understanding the developments can help
you run your company in a way that
matches the times
number two track changes among consumers
the needs and desires of your target
audiences also evolve with time the
demographics who responded well to your
promotions during your growth phase may
grow older replaced with another
generation with unique traits who may
respond differently even if you plan to
target the same group of consumers it's
important to refine your approach
occasionally so you meet each new
generation's expectations for example a
company that sells camera equipment has
always targeted young adults between the
ages of 18 and 24. during the growth
phase there was a demand for bulky
cameras that could print photographs
instantly however during the maturity
phase the current young adults wanted
small cameras that could capture clear
digital photos although the ages of the
target audiences were consistent the
interests of the consumers were
different requiring the company to
release products its consumers wanted
number three use innovative technology
the advancement of technology can alter
the way you run your business
incorporating innovative technology and
marketing strategies can help firms
remain competitive and differentiate
themselves from others for example a
technology startup incorporates the same
technology from smartphones into a watch
allowing consumers to communicate with
others and check their notifications
from an accessory on their wrist the
innovation begins a trend among similar
companies and the startup experience is
an increase in sales and strengthens its
connections with consumers
number four consider consumers
perceptions the changing interests of
your target audience can also influence
your brand's reputation rebranding your
company as you undergo the life cycle
stages can enable you to preserve a
positive public standing for example in
previous decades your approach may have
been to produce as many products as
quickly as you can making them available
for your customers convenience now you
notice your target audience's concern
for the environment so you launch
products that consumers can reuse
several times which limits unnecessary
waste the change in your marketing
strategies is consistent with your
target audiences helping you maintain a
beneficial relationship with them
all right that is all for today's topic
so what do you think about the product
life cycle can you apply this model to a
product you are interested in please
leave your thoughts in a comment below
if you like this video please make sure
to give it a thumbs up and to subscribe
the channel thanks for watching and i
will see you next time
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