Product Life cycle, 4 stages of product life Cycle

Educationleaves

16 Apr 202104:45

Summary

TLDRThis video explores the concept of the product life cycle, detailing its four stages: introduction, growth, maturity, and decline. It explains how products evolve from market launch to eventual discontinuation, influenced by factors like competition and consumer demand. The example of typewriters illustrates this cycle, showing how technological advancements can lead to a product's decline.

Takeaways

🔍 The product life cycle is the duration from a product's introduction to its removal from the market.
🚀 Products may stay in the market for a long time or be discontinued due to factors like saturation, competition, and decreased demand.
📈 The product life cycle includes four stages: introduction, growth, maturity, and decline.
💡 Introduction stage involves significant investment in advertising to create awareness of the product's features and benefits.
📊 Growth stage is characterized by a rise in sales, where consumer demand increases and the market expands.
💰 Maturity stage is the most profitable, with increased production volume and reduced costs, but sales growth slows down.
🛠️ Companies may reduce marketing in the maturity stage and start developing new products for different market segments.
📉 Decline stage is inevitable, with rapid drops in sales and changing consumer behavior, leading to eventual discontinuation.
🔧 The concept of the product life cycle is used by management and marketing to decide on strategies like advertising, pricing, and market expansion.
📝 An example of the product life cycle is the typewriter, which was replaced by newer technologies like computers and mobile devices.
👍 The video encourages viewers to like, subscribe, and download more information from the provided link.

Q & A

What is the product life cycle?
-The product life cycle refers to the period from when a product is introduced to consumers until it is removed from the market. It includes various stages such as introduction, growth, maturity, and decline.
Why is the product life cycle important for management and marketing departments?
-The product life cycle is important for management and marketing departments as it helps them decide when to increase advertising, reduce prices, expand to new markets, or redesign packaging based on the product's current stage in the cycle.
What are the four generally accepted stages of the product life cycle?
-The four generally accepted stages of the product life cycle are the introduction stage, growth stage, maturity stage, and decline stage.
What happens during the introduction stage of the product life cycle?
-During the introduction stage, a product is launched into the market with substantial investment in advertising and marketing to make consumers aware of the product's features and benefits.
How does the growth stage differ from the introduction stage in the product life cycle?
-In the growth stage, there is a gradual rise in sales, and at some point, a significant increase in consumer demand occurs, leading to a takeoff in sales. Companies may need to heavily invest in advertising and promotion to compete with rivals.
Why is the maturity stage considered the most profitable in the product life cycle?
-The maturity stage is considered the most profitable because production volume increases while the costs of producing and marketing decline. Sales growth slows, indicating a largely saturated market.
What actions do companies typically take during the maturity stage of the product life cycle?
-During the maturity stage, companies may reduce marketing efforts, focus on cost reduction, and start developing new or alternative products to reach different market segments.
What factors contribute to the decline stage in the product life cycle?
-Factors contributing to the decline stage include market saturation, increased competition, decreased demand, and dropping sales, which eventually lead to the product being discontinued from the market.
Can you provide an example of a product that has gone through the product life cycle?
-An example is the typewriter, which grew in popularity in the late 19th century but was eventually replaced by electronic technologies like computers, laptops, and mobile devices, causing a drop in demand and revenue.
How can consumers' behavior change during the decline stage of the product life cycle?
-During the decline stage, consumer behavior changes as there is decreasing demand for the product. Sales drop rapidly, and the product may eventually be discontinued from the market.
What does the video suggest for those interested in learning more about the product life cycle?
-The video suggests that interested viewers can read more details or download a PDF by following the link provided in the video description.

Outlines

00:00

🌟 Introduction to Product Life Cycle

This paragraph introduces the concept of the product life cycle, explaining it as the duration from when a product is introduced to consumers until it is removed from the market. It highlights that products go through continuous stages, from launch to discontinuation, influenced by factors like saturation, competition, and decreased demand. The management and marketing departments of companies use this concept to determine strategic actions such as increasing advertising, reducing prices, expanding to new markets, or redesigning packaging.

📈 Understanding the Stages of Product Life Cycle

This paragraph delves into the four generally accepted stages of the product life cycle: Introduction, Growth, Maturity, and Decline. It describes the Introduction stage as a period of significant investment in advertising and marketing to create consumer awareness. The Growth stage is characterized by a rise in sales and increased consumer demand, necessitating heavy investment in advertising to compete. The Maturity stage is the most profitable, with declining costs and slowing sales, leading companies to reduce marketing and develop new products. The Decline stage is inevitable, with rapidly dropping sales and consumer behavior changes, ultimately leading to product discontinuation.

🔍 Case Study: The Evolution of the Typewriter

This paragraph provides a historical example of the product life cycle using the typewriter. Initially introduced in the late 19th century, typewriters experienced growth in popularity due to their technological advancements in ease and writing accuracy. However, the advent of new electronic technologies like computers, laptops, and mobile devices quickly replaced typewriters, leading to a decline in their revenues and demand. This example illustrates the typical progression of a product from introduction to decline.

Mindmap

Keywords

💡Product Life Cycle

The term 'Product Life Cycle' refers to the stages a product goes through, from its introduction to the market until it is eventually removed or discontinued. It is a fundamental concept in marketing and management, illustrating the typical progression of a product's sales and relevance over time. In the video, this concept is used to explain how products evolve and the strategic decisions companies make at each stage to maintain market presence.

💡Stages of the Product Life Cycle

This concept outlines the distinct phases that a product experiences throughout its life cycle. The video script describes four main stages: Introduction, Growth, Maturity, and Decline. Understanding these stages helps in strategic planning for product development, marketing, and potential discontinuation.

💡Introduction Stage

The 'Introduction Stage' is the initial phase where a new product is launched into the market. It involves significant investment in advertising and marketing to create consumer awareness. The script mentions this as the first step where a company gauges consumer response and the potential success of the product.

💡Growth Stage

The 'Growth Stage' follows the introduction, characterized by an increase in sales as consumer demand rises. The video emphasizes the importance of heavy investment in advertising and promotion during this phase to compete effectively and capture a larger market share.

💡Maturity Stage

The 'Maturity Stage' is depicted as the most profitable time in a product's life cycle. Here, production costs decrease due to economies of scale, and sales growth slows down, indicating market saturation. The script explains that companies may reduce marketing efforts and start developing new products during this phase.

💡Decline Stage

The 'Decline Stage' is the inevitable phase where product sales begin to drop rapidly due to decreasing demand. The video script uses this term to describe the final phase of a product's life cycle, where it is eventually discontinued from the market.

💡Market Saturation

Market Saturation refers to a state where the market is fully penetrated, and there is little room for growth. In the context of the video, it is mentioned as a factor contributing to the transition from the Maturity to the Decline stage of the product life cycle.

💡Advertising

Advertising is a key marketing tool used to promote products and services. The video script discusses its importance during the Introduction and Growth stages to raise awareness and compete with rivals, respectively.

💡Competition

Competition is the rivalry among similar products or services in the market. The script highlights how increased competition during the Growth stage necessitates higher advertising and promotional efforts to maintain market position.

💡Demand

Demand refers to the quantity of a product that consumers are willing and able to buy at a certain price. The video script explains how changes in demand directly affect the stages of the product life cycle, particularly leading to the Decline stage when demand decreases.

💡Discontinuation

Discontinuation is the process of ceasing the production and sale of a product. In the video, it is presented as the final outcome of the product life cycle when sales drop and the product is no longer viable in the market.

💡Typewriter

The typewriter serves as an example in the script to illustrate the product life cycle concept. It was initially introduced and grew in popularity, but with the advent of electronic technologies like computers and mobile devices, the demand for typewriters declined, leading to their discontinuation.

Highlights

Introduction to the concept of the product life cycle and its stages.

Explanation of how the product life cycle affects the market presence of products.

Definition of the product life cycle as the period from product introduction to market removal.

Importance of the product life cycle in strategic decision-making for management and marketing.

Description of the four stages of the product life cycle: Introduction, Growth, Maturity, and Decline.

Details on the Introduction stage, including significant investment in advertising and market awareness.

Growth stage characteristics, such as a rise in sales and the need for heavy advertising to compete.

The Maturity stage as the most profitable, with increasing production volume and decreasing costs.

Strategies companies adopt during the Maturity stage, like reducing marketing and developing new products.

Inevitability of the Decline stage due to market saturation and changing consumer demands.

The rapid drop in sales and eventual discontinuation of products in the Decline stage.

Historical example of the product life cycle using the typewriter and its replacement by modern technology.

The impact of technological advancements on the product life cycle of the typewriter.

Encouragement for viewers to read more details or download a PDF for further information.

Invitation for viewers to like the video and subscribe to the channel for more content.

The role of consumer satisfaction in the repeat purchase of products during the Growth stage.

Market expansion and new customer awareness as key factors in the Growth stage.

The length of the Maturity stage varying depending on the product and brand longevity.

Coca-Cola as an example of a brand with an extended Maturity stage.