The product life cycle is certain stages that any product goes through. Each of them requires different marketing options. The duration of all stages for each product is individual. This is due to the characteristics of the product, the presence of similar products and other factors. Each stage of a product’s life cycle cannot last forever, since any product is eventually superseded by a newer model. For example, black and white televisions eventually went out of use, they were replaced by color ones. In turn, a few years later they were replaced by liquid crystal and plasma panels.
Life cycle - a concept that is used for a group of products and for any specific product. Moreover, the duration of each stage can take several days or decades. For example, a sensation may have a cycle for a week, and the drug "Penicillin" - for several decades. The purpose of marketing is to extend the product life cycle. This can be done using advertising, marketing research and other methods. Price is a key variable that depends on the life cycle. That is, in each period a different pricing policy will be used.
Consider the stages of the product life cycle. Product launch on the market. Demand is usually quite low, so companies spend significant amounts of money on advertising. The purpose of marketing is to convey to consumers information about a new product. It is necessary for the novelty to gain a foothold in a certain segment of the market. The product must reach the planned critical mass over a period of time. The critical mass is the sales volume that will ensure its viability.
Depending on what type of product is being launched on the market, a pricing policy will be chosen. If the selected segment already has a large number of similar products, then the cost of the new product will be low at first. This position will help reach as many consumers as possible.
A company may use a “skim cream” policy. It is used if a new prestigious product is launched on the market, for example, plasma TVs. The most solvent customers will be happy to pamper themselves with new products, and the company will receive a large profit from the release of this product.
After entering the market, a stage of growth begins. This period is due to a rapid increase in demand. Costs per unit of goods are rapidly falling, as the volume of production is growing. At the moment, it is important to take as much market share as possible , if possible even to become a leader. At the growth stage, it is quite easy to conquer your segment if consumers are offered unique products. But a mature market requires more effort, as growth will occur due to the crowding out of competing companies. At the growth stage, some products will suspend their life cycle, as they will not survive in a competitive environment.
We pass to the stage of maturity. Demand is becoming steady, the product is already familiar to customers. But right now, the company begins to look for ways to attract new consumers of goods, otherwise demand will fall, and market share will become less.
A recession period completes the product life cycle. It is inevitable for almost every product, except for essential products. Now the company is starting a real price war. There is a decrease in price to get an increase in demand. With the proceeds, the company produces new units of goods. But this cannot go on forever. The company is forced to create a new product that will begin its life cycle in the market and bring it profit in the future.