Product Life Cycle (With Real World Examples) | Strategic Management | From A Business Professor

Summary

This 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

00:00

📈 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.

05:00

🚀 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.

Keywords

💡Product Life Cycle

The product life cycle is a fundamental concept in business that describes the stages a product goes through from its introduction to the market until it is eventually removed or replaced. In the video, this concept is central to understanding how businesses strategize around different phases of a product's existence. The script outlines four distinct stages: introduction, growth, maturity, and decline, each with its own strategic implications for marketing, production, and sales.

💡Introduction Stage

The introduction stage is the first phase of the product life cycle where a new product is launched and market awareness is built. As described in the video, this stage is characterized by slow sales as the demand for the product needs to be created. The script emphasizes the importance of a strong market strategy to make consumers aware of the product's benefits, which is crucial for the product's success and progression to the next stage.

💡Growth Stage

The growth stage follows the introduction stage and is marked by an increase in demand and production. The video explains that this is when the product becomes more widely available and sales growth becomes more pronounced. It is also the time when competitors may enter the market, making branding and pricing strategies critical for maintaining market share.

💡Maturity Stage

Reaching the maturity stage indicates that the product's sales growth has slowed, suggesting a largely saturated market. The video describes this stage as a time when the product is well-established, and the focus shifts to maintaining market share through branding, price, and product differentiation. The script also mentions that retailers' roles change from promoters to stockists and order takers in this phase.

💡Decline Stage

The decline stage is the final phase of the product life cycle where sales start to decrease due to factors like increased competition or technological advancements that make the product obsolete. The video uses the example of horse-drawn carriages being replaced by automobiles to illustrate this stage. Companies may choose to discontinue the product or continue production on a smaller scale.

💡Branding

Branding is a marketing strategy that involves creating a unique name and image for a product in the consumers' minds. In the video, branding is highlighted as increasingly important during the growth and maturity stages to differentiate a product from competitors and maintain consumer loyalty. It is a key tool for companies to establish a strong presence in the market.

💡Competition

Competition refers to the rivalry among firms selling similar products or services. The video script discusses how competition can influence each stage of the product life cycle, from the need to create demand in the introduction stage to the necessity of differentiating the product in the maturity stage. The decline stage is often triggered by competitors offering superior products or services.

💡Innovation

Innovation is the process of introducing new ideas, products, or methods to improve or replace existing ones. The video emphasizes the role of innovation in the product life cycle, particularly in the decline stage where it can lead to the obsolescence of current products. It also mentions how continuous innovation can help prolong the maturity stage of a product.

💡Market Saturation

Market saturation occurs when a product has reached its maximum potential in terms of sales and there is little room for growth. The video describes this as a characteristic of the maturity stage, where most potential consumers have already purchased the product, and sales growth slows down.

💡Rebranding

Rebranding is the process of changing the branding elements of a product or company to align with new market trends or consumer perceptions. The video suggests rebranding as a strategy to maintain a positive image and relevance as a product moves through its life cycle. It can help in adapting to changing consumer interests and maintaining a beneficial relationship with the target audience.

💡Technological Advancements

Technological advancements refer to the development of new technologies that can significantly impact products and industries. The video script uses the example of electric vehicles and AI products to illustrate how continuous technological innovation can keep products in the growth or introduction stages of the life cycle, delaying the onset of decline.

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