In this lesson, we define what the product/service life cycle is so readers will have a general understanding of its use. The lesson also breaks down each of the four stages and what products/services encounter during each stage.
What Is the Product/Service Life Cycle?
Have you ever tried to follow the trail of a stick or a pinecone that was placed in a river, watching as it flows away? This is similar to the life cycle of a product or service. The stick or pine cone represents the product or service and the river represents the various places (stages) that the object passes through.
Before we delve into just what each stage of the life cycle represents, let’s first define the product life cycle.The product or service life cycle is a process that follows the different stages that a product or service encounters. The life cycle is broken down into four stages that help to identify where in the market the product or service is at the current time. Let’s take a closer look at the different stages that every new product or service will encounter.
Introduction & Growth Stages
The introduction stage of the product/service life cycle is when a business is launching a product or service into the market for the world to see. For this lesson, let’s use a product called Fab-O-Riffic, a brand new laundry detergent. In the introduction stage, Fab-O-Riffic is introduced into the market for people to purchase. This stage is designed with the objective of increasing the awareness of Fab-O-Riffic in an effort to get consumers better acquainted with the product or service.The next phase of the product/service life cycle is the growth stage.
Now that the product has graduated from the introduction stage, it is now ready for consistent increases in sales. It is during this stage that Fab-O-Riffic will see a significant growth in revenue. The growth stage is also when Fab-O-Riffic will attempt to build a loyal customer base as well.
Maturity ; Decline Stages
As Fab-O-Riffic reaches the end of the growth stage, it enters the next phase, which is maturity. At this stage, Fab-O-Riffic’s sales have mostly reached a stopping point and remains rather stagnant (not moving).
The goal at this stage is to try and find new or untapped uses for Fab-O-Riffic.By the time Fab-O-Riffic has reached its final stage, it has begun to see a significant decline in sales and demand. This final stage in the product/service life cycle process is when Fab-o-Riffic’s management will try to postpone the decline as long as possible. There are three important terms to know for this stage of the process:
- Re-positioning refers to finding new uses for a product/service.
For example, Fab-O-Riffic can re-position by using the product as an alternative kitchen and bathroom cleaner.
- The term harvesting, refers to a method that shows a reduction in marketing resources for a product or service that saves money. Fab-O-Riffic could take advantage of harvesting by deciding to withdraw most of the monetary budget that has been set aside for it.
- Divesting is when a business decides to pull out or withdraw all marketing and advertising efforts. By divesting, Fab-O-Riffic would not place any additional money into the product for advertising or marketing. Divesting typically means that a product will be responsible for selling itself without extra monetary efforts. In some of these divesting scenarios, a product in decline may be purchased by another company.
The product/service life cycle is a process used to identify the stage in which a product or service is encountering at that time. Its four stages – introduction, growth, maturity, and decline – each describe what the product or service is incurring at that time. The life cycle is useful as it helps organizations to prepare accordingly for their marketing efforts in targeting customers.