The stages a new product goes through in the marketplace is referred to as the product life cycle which includes a products Introduction, Growth, Maturity, and Decline.
a visual of the stages of the product life cycle
In the introduction stage a product is first acquainted with its target market. Because the product is new, profits are low and marketing expenses are generally high. Companies establish their pricing strategies within this stage. In penetration pricing an initially low price is set in order to stimulate sales. In price skimming an initially high price is set in order to offset high production costs.
The growth stage is when companies see rapid sales and profitability. Marketing strategies are changed so as to promote or continue repeat business from satisfied customers. Changes are made to products to help differentiate the product from that of the competition.
These changes made in the growth stage that help differentiate a product from the competition come in handy during the maturity stage where there is a large amount of competition in the market causing a slowing of sales and profits. Marketing in this stage is centered upon holding market shares.
Lastly, the decline stage goes along with its name, and is characterized by a decline in sales. Marketing is no longer relevant to the future worth of the product and therefore companies have two options for a product in the decline stage- Deletion which involves dropping the product from a company's product line, or harvesting which involves keeping the product in the product line, but diminishing marketing costs.
As we know in business you can never predict the market, therefore it is nearly impossible to predict the length of time a new product will spend in each stage of the product life cycle. Not all products spend the same amount of time in each stage of the product life cycle. There are high-learning products, low-learning products, fashion products, and fad products.
high-learning products require a large amount of consumer education and therefore spend a large amount time in the introductory phase. In the ever-advancing world of technology perhaps the newest trend to come is that of the Google Glass. As a Media Studies, Journalism, and Digital Arts major, I have spent a decent amount of time in several of my classes talking about this new technological advancement and I was shocked when a student asked what they were in our marketing class last week. This just goes to show that high-learning products such as Google Glass need to spend a large amount of time in the introduction stage to generate awareness.
Google Glass
low-learning products require little to no consumer education, allowing sales to begin immediately. The benefits of such a purchase are easily understood thus creating a market full of competition. Marketing strategies within this phase aim to broaden product distribution so as to produce a large market share. Examples of low-learning products are razor's, toothpaste, and several other everyday items.
fashion products are styles of the times. These products go in and out of style on a regular basis going through each stage of the product life cycle. In the decline phase, fashion products are harvested as they will most likely become in style again.
Leopard is a fashion product
fad products experience rapid sales upon introduction into the market, quickly followed up by a fast decline in sales. I can remember being in middle school when Crocs were popular, and then the following month they weren't cool at all. Another example of a fad I witnessed were the rubber bracelets that were shaped like different animals, places, or things called Silly Bandz, which were everywhere for the two months they were actually popular.
Silly Bandz shaped like characters from Yo Gabba Babba, a popular children's television show
And thats the circle of (a products) life!
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