The product lifecycle in marketing is a process that defines and classifies the context of the product in the market from its launch to its decay. But why is it important?
The analysis of this information can help in developing strategies for the product to have greater longevity!
So, this tool can be essential for the success of your product, because it makes it possible to visualize problems and helps in the elaboration of strategies. Therefore, below you will see what the product lifecycle is and learn about six marketing strategies for each phase of it:
What is the product lifecycle in marketing?
The product lifecycle is an analysis divided into stages that makes it possible to identify the context of a product in the market. The four stages of the cycle are as follows:
- Introduction: it is the period in which the product was just launched in the market and, probably, it is innovative. However, it still needs to be recognized and established to increase sales;
- Growth: this is the phase in which the product is being increasingly recognized by the market and, therefore, is conquering new consumers. That is, demand and sales are growing;
- Maturity: is the period of peak profit, because the product is already established in the market and has many customers. However, it can also be a time of stagnation due to market saturation and sales ceiling reaching;
- Decline: is the stage where sales go into decline due to the product no longer adding as much value to the customer compared to competitors or because it has become obsolete.
6 marketing strategies for the product lifecycle
Each stage of the marketing product lifecycle demands different strategies. This is because the product’s market context is different at each stage. Therefore, it is very important to adapt the action plans according to the current situation.
Therefore, the marketing strategies that we are going to present can be classified according to the stage of the cycle in which their application makes the most sense:
- Introduction: skimming and penetration;
- Growth: branding and quality improvement;
- Maturity: product and market modification;
- Decline: cost reduction or product discontinuation.
Skimming is a marketing strategy aimed at the product lifecycle introduction stage in marketing. And this technique can be put into practice in two different ways: agile (fast skimming) or slow (slow skimming).
Fast skimming consists of bringing a product to the market with a high price and an equally high investment in marketing and advertising campaigns.
Here, the idea is for the product to reach a large number of people, convincing them that it is worth the set price. Thus, if the strategy is successful, it is possible to obtain a large profit margin.
Slow skimming, on the other hand, differs in the size of investments to promote the product. The purpose of this strategy is to maximize profits, because the price will continue to be high, but the expenses will be much lower.
However, as the name already points out, this is a slower method, as the product will reach the knowledge of fewer people.
Now that you are familiar with skimming, it is worth noting that it is usually indicated for products that have a more limited market, with a target audience with high purchasing power.
Also, due to the high price, this strategy is usually used with more exclusive or luxury products. But that does not exclude the possibility of using it in marketing an innovative and high-quality product.
And, speaking more specifically of the two types, fast skimming is indicated for lesser-known brands or when there is strong competition.
Meanwhile, slow skimming is recommended for established brands or those in a market where there is less competition.
Also Read: The Secret to Increasing Profits and Getting Bigger Sales
The penetration strategy is another one aimed at introducing a product into the market. Similar to skimming, it can be done in two ways, generating two types of methods: fast penetration and slow penetration.
Fast penetration is about setting a low price and making large investments in marketing and advertising to promote the product on a large scale.
This technique is most used when the product or brand is less known and there is great competition. In view of this, the goal is to gain market share quickly. However, the profit is lower because of the price and expenses.
Slow penetration follows the same path as setting a low price, but marketing investments are similarly reduced.
This strategy is usually followed when the brand is known and competition is not as strong. Thus, it is possible to gain market share at a higher profit.
Also check out: How to stand out in the competitive market
When the product is in the growth phase, it means that it already has good visibility and a good number of consumers, but there is room to go further.
Therefore, branding strategies can be of great help in positioning and establishing the product in the market.
In this way, it is possible to maximize the longevity of the product’s life cycle in marketing, because branding will establish it as something of quality.
In addition, it makes it possible to obtain “brand defenders”, who are loyal customers who promote your product because they believe in its quality.
4. Improvement of qualities
Further improving your product’s qualities can be another good strategy for the growth stage. And this can be done by launching new features or by improving existing ones.
This strategy can be critical if competition is strong. That’s because, by ensuring high quality and a good level of innovation, you add more value to consumers.
Thus, your product will gain more market shares for being better compared to competitors.
5. Product and market modification
When entering the maturity phase, the product sells less because the market may be saturated or because the peak of the product has already been reached.
Therefore, it is necessary to think of ideas of what can be done with the product so that it is considered distinct from the others and attractive again.
Using the product modification strategy can be a good way out. It even goes against the previous method, because it basically consists of once again developing new features or updating existing ones.
But if the analysis shows that the improvement in quality is not enough, a more aggressive modification can be made.
This means making a complete change of target audience or expanding the product line with items aimed at other markets.
This strategy relies on a lot of analysis and evaluation of the product lifecycle in marketing. Only then will it be possible to identify if there is a way to make the changes and if they make sense.
6. Cost reduction or product discontinuation
There are two strategies for when the product goes into decline and the analyzes show that it will hardly ever grow again: reducing expenses and maintaining existing customers or discontinuing it.
And as much as discontinuation seems like a negative attitude, it often isn’t — and maybe it was already an expected phase of the cycle. This happens a lot with technological products, as after a certain period of time they become obsolete.
But why is it not a negative action? Because the saved costs can be used to invest in a new product that makes more sense for the current market. In this way, it will be possible to return to the introduction and growth phase with another product.
How does your company monitor the lifecycle of a product?
In order for a company to be able to track which stage of the lifecycle each of its solutions is in, it is essential to have data-based marketing management. How much does your operation track sales insights to better anticipate a phase shift?