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
