Product Life Cycle Explained: Product Life Cycle Stages, Examples and Diagram (2023)

Businesses, especially those offering SaaS products, need a good understanding of the product lifecycle. From business owners to marketing leaders to CX teams, they need to have a clear understanding of the product lifecycle and plan their activities accordingly. The knowledge helps them make important decisions related to product design, features, price points, promotional plans, market expansion, packaging, etc.

A lack of knowledge of a product's life cycle is one of the main reasons why several important business decisions falter. For example, if the product manager does not know the product life cycle, he cannot develop strategies to improvise the product. This could make the product irrelevant to customers.

If a marketer doesn't know the lifecycle of a product, the executive may not plan ads.

Given these imperatives, it is important that professionals, particularly in managerial positions, have a holistic understanding of the product lifecycle.

As always, we're here to help you better understand and/or improve the product lifecycle. In this blog you will learn everything about the product life cycle, from phases and examples to product life cycle diagrams.

What is a product life cycle?

Put simply, the life cycle of a product is the period of time between the introduction of a product and its withdrawal from the market. At some point, every product is presented to its customers. Likewise, the product goes through several phases and finally reaches a stage where it has to be withdrawn from the market. Take the example of a SaaS product: software for example. When software comes out, it is appreciated through adoption, but eventually removed or replaced with another version or product.

While the focus is more on product introduction and removal, the other phases of the product lifecycle are just as important. The real life of a product lies between these two extreme points. Between these phases, however, the product goes through growth and maturation phases.

To make it easier for you, we have listed the four phases of the product life cycle:

• introduction
• increase
• maturity
• Reject

Please understand that launching a product is not the absolute beginning. Before the product hits the market, several important activities take place.

Before the product is launched or brought to market, internal stakeholders spend a lot of time on research, development and testing.product design. The preparatory work before the product serves as the basis for the final product result. For example, the product development team needs to understand customer needs and plan their features accordingly. The target group and market segmentation must also be planned in this phase. These phases also determine the profitability of the product. In the event that the product does not meet profitability expectations, it will not be launched or scaled.

Phases of the product life cycle

As explained above, the product lifecycle is divided into four general phases. Dividing the product lifecycle into these phases makes marketing and management decisions much easier. A well-managed product lifecycle maximizes a product's return and profitability. At the same time, poor life cycle management can lead to product failure or reduce its useful life on the market.

Now let's analyze the four phases and see how they affect marketing and management.

The introductory phase

They have conducted market studies, identifiedmarket segments, and also designed and developed a product that addresses a specific pain point. The product is launched on the market. From a customer experience perspective, this is not only the most expensive phase, but also the most important. A lot of marketing and promotional activities also take place during this phase. Therefore, the effort is high.

This is the stage where customers should be made aware of the existence of the product. Marketing and CX teams need to work together to communicate clearly about the product and its value. If not done properly, there is a chance that the product will fail even before it reaches the second stage.

Ads at this stage should focus on customer pain points and present the product as a solution. Sales tend to be slow. But it should be noted that the requirements are gradually increasing. This phase can take a long time, especially if the product is very innovative. When a company develops a unique product that is very different from existing products on the market, it will take time to attract customers. Marketing managers have to convince customers of the usability of the product. If a product has survived this phase, the chances of success multiply.

Use: Marketing activities at this stage can make or break the product. Marketing leaders need to project the value of the product and position it as "the solution." At the same time, the CX team must ensure that customers see and receive the value promised. The focus here should be on value creation rather than sales.

growth phase

Once the product has successfully passed the introductory phase, it enters the growth phase. In this phase, the product is accepted and demanded. The increasing demand would boost production and expand the availability of the product in the market. Therefore, development teams are on the lookout.

The first stage of the product lifecycle can function with a slow but steady increase in demand. However, the growth phase requires a sharp increase in demand for the product. If the demand for the product doesn't increase sharply at this stage, the product may fail or become less profitable.

This phase can also be referred to as the competition phase. You can expect competitors to enter the market. You can develop similar products or products that are better. To maintain this, you need to differentiate your product from the competition..'You need to focus on maintaining the quality of the product and/or adding new features to the product. In addition, the availability of the product on the market and its price also require special attention.

Use: You should try to increase your market share and focus on improving your product during the growth phase. This is the key to staying ahead of the market.

The maturity phase

Products that survive the competition in the growth phase reach the maturity phase. At this point, the product is already positioned on the market. At this stage, both advertising and production costs are significantly reduced. This increases the profitability of the company.

In the maturity phase, the product begins to move towards market saturation. This means that the demand for the product reaches a level where it tends to be stable. Things appear to be settled at this point, but they are not. Branding, product differentiation and pricing become even more important as competitors constantly try to capture your market share.

Use: At this stage, you need to focus on marketing activities to make your product stand out from the rest. Product differentiation at this stage is the way to increase your market share.

The decline phase

Nothing is forever. Everything that comes onto the market must one day disappear. When competitors come up with a more innovative product, your product's relevance may decrease. Sometimes it can be due to technological updates.

Companies with a big vision typically start preparing for new product launches as soon as they see market saturation. A saturated market indicates that there is no growth opportunity for the existing product at the existing price. A company can survive the decline phase and continue to offer its product with reduced profit margins.

In this phase, companies often have two alternatives: continue to offer the product with a reduced profit margin or switch to other companies.

Use: In sectors such as fashion and accessories, the downward phase can be reversed with a trend reversal. But for the SaaS industry, the only option for a product past this stage is to become obsolete.

Product life cycle diagram

The following is a product life cycle diagram.

The chart shows how slow the demand for the product is during launch. It reaches a maximum during the growth phase. Demand remains balanced during the maturity phase and begins to decrease in the acceptance phase.

Examples of products that have completed their product life cycle

Now that you have understood the four phases of a product life cycle, we want to clarify your understanding with a few examples.

The introductory phase

Driverless/autonomous vehicles: AI-powered vehicles that do not require a driver are in the introductory phase. Currently they do not circulate with other vehicles on the roads. But customers talk about it. build marketermarket demandfor this product through advertising.

Smart Homes – Once again, AI-powered homes where everything is automated are still not commonplace. But we are being introduced to the concept that something like this will become a reality in the near future. Customers mentally prepare for such an innovative product. Smart homes are therefore in the introductory phase.

growth phase

Internet: One can say that the Internet product is in the growth phase. It was presented well and everyone knows it. Internet Service Providers are now doing everything they can to enter the market and expand their presenceconsumer baseas much as possible. Demand is high and the number of customers is growing rapidly.

The maturity phase

Smartphones: Almost everyone has a smartphone in their hands these days. This product has passed the introductory and growth phase. Companies that offer smartphones are now concerned with offering competitive prices, creating product differentiation and maintaining their brand identity. The descent phase may still be a long way off, but this product has come a long way in its maturity phase.

The decline phase

Typewriters: Typewriters were an innovative product when they were introduced in the 19th century. They navigated through the launch and growth phases and became popular in the market. With the advent of electronic word processors and computers, typewriters had to go through their period of decline. Today they are obsolete.

Big Screen Computers: The computers eliminated by the typewriter were nothing like the flat screen desktops and laptops we use today. The first large-screen computers also went through all four phases of the product life cycle, and today their production and sales are in decline. There is no market for large screen computers.40

last words

A clear understanding of the product lifecycle helps management and marketing leaders make the right decisions at the right time. Different phases require different marketing strategies. Therefore, it is important to assess the current state that a company's product is in. A product in the launch phase requires different marketing tactics than a product in the growth phase. A product in the growth phase requires different production planning than a product in the maturity phase. Therefore, we need to understand and evaluate the different phases of the product life cycle.