Product/Service life cycle
Every product/service is subject to a life cycle. The product/service life cycle means that a product or service is going through a phase of introduction, growth, maturity, and decline. The life cycle is important as your marketing strategies need to be agile to be applied to your product or service at a certain moment in the life cycle. The product life cycle contains four main phases that are completed during the life of the product.
Four phases of the product life cycle
There are four main phases in the product life cycle, namely: the introduction phase, the growth phase, the maturity phase and the decline phase. The phases of the product life cycle can be linked to various models, such as the adoption model of Rogers or a BCG matrix.
The image below shows the product life cycle.
Introduction phase
When a new product /service is developed, it enters the introduction phase the moment it is introduced to the market. A product in the introduction phase still has few sales. Increasing the name recognition of the product through various market and promotional strategies can increase the sales of the product, be prepared as this phase does entail a lot of costs.
Growth phase
When the product enters the growth phase as sales increase and it is important to continue growth if possible. The business starts to become profitable during the growth phase. Consistent marketing is key for continued growth to ensure repeat purchases, creating regular customers. When the maximum growth has been achieved, the product enters the maturity phase.
Maturity phase
When a product is in the maturity phase, it realizes a lot of sales and ensures profit. The profit is typically invested in new products or innovation. During the maturity phase it is vital for certain products/services to renew or innovate the product to prevent a decline in sales. When a product is in the maturity phase, marketing needs to focus on stimulating continued use. .
Decline phase
The longer the product is on the market without change, sales may fall, for example because the product is outdated or due to increased competition. When the product/service is in the downturn phase, it is important to extend the life cycle of the product for as long as possible, because the product can still yield a profit in the downturn phase. The fall in sales can also be slowed down through increased marketing activity. To prevent a decline phase, it is necessary for products to renew or innovate the product during the maturity phase.