product life cycle business plan

Product Life Cycle Explained + Examples

Arlene Soto

13 min. read

Updated May 11, 2024

Everything has a shelf life. Whether it’s a car, your phone, exercise equipment, or anything else — eventually its use and sales potential will run dry. That’s because anytime that a product enters the market it follows specific product life cycle stages.

The stages of a product life cycle take it from being introduced as the next big thing, to something that everyone has and eventually everyone has forgotten about. This process is constant, meaning that every business needs to be aware of how it works and how it can affect their products.

Let’s look at the ins and outs of the product life cycle and how you can leverage it to manage your business.

• What is a product life cycle?

The product life cycle is the length of time from when a product is introduced to the consumer market up until it declines or is no longer being sold. This cycle can be broken up into different stages, including: development, introduction, growth, maturity, saturation, and decline. The full product life cycle is typically used to determine when it’s appropriate to increase advertising, adjust pricing, explore new markets, redesign packaging and even adjust your messaging. 

• What are the stages of a product life cycle?

Each stage has its costs, opportunities, and  risks , and individual products differ in how long they remain at any of the life cycle stages. While there are differing opinions regarding if there are four, five, or six stages of the product life cycle, each option includes the following steps. 

1. Development

The development stage of a product life cycle is the research phase before launch. Technically, this falls outside the definition of a product life cycle, but it’s a vital step to be aware of. In short, it’s used to determine the viability of a product, confirm when it should go to market and how to approach your official launch.

At this stage, costs are accumulating with no corresponding revenue. Some products require years and large capital investment to develop and then test their effectiveness. Since risk is high, outside funding sources are limited. 

Existing companies often fund research and development from revenue generated by current products. For startup businesses, this stage is typically funded by the entrepreneur from their own personal resources. For those developing a new product, it may be wise to land on a  minimum viable product  (MVP) as early as possible. 

This can be as minimal as a sketch or as complex as a sample or prototype version of the product itself. You just need enough to show how your product will work to  potential investors  and customers. The earlier you can validate its market potential, the more likely you’ll be to land investment and launch.    

2. Introduction

The product life cycle introduction stage is when your product is first launched in the marketplace. It’s where you step beyond the product itself to  develop a market  for the product and build product awareness. Here, you’ll work to carve out a  target market , conduct a market analysis to understand the competitive landscape, and ideally land your first few sales.

Marketing costs are high at this stage, as it is necessary to reach out to potential customers. The best approach when promoting a new product is to focus on testing distribution channels and messaging. While your advertising budget may be hefty, you can strategically leverage it to identify  marketing channels  that lead to higher conversions. This is also the stage where intellectual property rights protection is obtained. Depending on your market position, product pricing may be high to recover costs associated with the development stage. It also may be lower, meaning you’ll initially be running at a loss until you gain traction. This is where landing initial funding efforts and mapping out  your cash runway  are vital to the success of your product.

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In the product life cycle growth stage, the product has been accepted by customers, and you are now striving to increase market share. That means that demand and revenue are growing, ideally at a steady rate. How long you achieve steady growth fully depends on your product, the current market landscape, and the adoption rate of customers.

If you’re entering an already crowded market with a product, you’ll likely  see competitors  react fairly quickly. If you’ve entered a market with less competition or are first to market in a breakout industry, you’ll likely see a slower response by new or current entrants. 

In either case, your response during this phase is to fine-tune your messaging, solidify your brand presence and expand into new distribution channels. This also may be the time to consider adding additional services to support and further differentiate your product. Things like support services, add-ons, or insurance packages are just a few options to consider. Having these additions available, or at least in progress, can better help you react to competitors and extend the return on investment (ROI) from a given customer.

4. Maturity and saturation

The mature stage is when sales will level off. This doesn’t mean you aren’t still growing, you just won’t see the same level of rapid growth as before. Typically at this point, you will begin to lower prices, offer free additions or make other adjustments to keep your products competitive. 

At the same time, you’ve also become more efficient. Production costs tend to decline, costly mistakes in the manufacturing process can now be avoided. Even your marketing expenditure is likely more refined and effective at this stage. So, while you may not be growing in volume, you’re likely at your most profitable in this stage.

However, it’s worth remembering that your competitors have likely now solidified their own offerings in this stage. This means that they have taken a portion of the market, further leading to the flattened growth of your own product. Most consumers are likely already using a version of your product and have begun  developing brand preferences .

This is when any adjustments to advance your product or the services that accompany it, should be made. If you’ve hit the point where any real adjustments simply aren’t possible, then your messaging, services, and add-ons should take full focus.

You may only be able to make incremental changes but can still look to market it as a refresh accompanied by new features or benefits. Video game consoles are a great example of this, where incremental updates to hardware are often touted to sell new consoles. The  Nintendo Switch OLED  edition is the latest example, where the only update is a new, slightly larger, and crisper screen. 

The decline stage for a product occurs when the market becomes saturated, competition peaks, and customer needs start to change. Companies at this stage have several options: 

• Discontinue the product
• Sell the manufacturing rights to another business
• Find new uses for the product
• Tap into new markets

It’s at this stage of the product life cycle that you’ll really need to weigh the costs and benefits associated with each option. Are you really capable of revising the product? Are there other features you simply haven’t tapped into? Is there a market you haven’t looked into that could benefit from your product?

If you can, look to run different  forecasting scenarios  during this time to see what each decision could lead to depending on product performance. Hopefully, you have other products to help support your business when one declines. Ideally, you’ll have multiple products or iterations running at different points in the product life cycle. 

• How do you know what stage of the product life cycle your products are in?

There’s no guarantee how long a product will stay in a given stage. This can make it difficult to know what stage you’re in and when you’ve entered the next one. 

Knowing the characteristics of each stage can help you better identify your current position. However, it’s often easier to look back at performance to determine where your business is and where it’s headed. You can leverage  this actual performance  to then help paint the picture of what to expect in the future. In fact, you can tie this exercise into your financial forecasts and compare them directly to your financial statements.

This process will ensure that you are always considering what comes next. It will give you a more informed perspective of the future, while also helping you avoid poor strategic decisions. This will also help you better understand the value of a given stage, making it far easier to apply the same methodology to other products. 

• How to use the product life cycle to manage your business

Knowing what stage you’re in can effectively help you develop a strategy for your product. As we explored above, the stage has just as much influence over your decisions as it does sales performance. Here’s how you can leverage your understanding of the product life cycle stages to manage and grow your business. 

Establish authority

During the introduction stage, you can look to position your product as the cheaper, better, or any number of benefits over the competition. This is when you not only establish the brand for the product but your business as well. 

Do you want to be known as the low-cost alternative? The eco-friendly or local solution? Or maybe you want to focus on  your company mission  and how your business operates.

Whatever the case, this is the stage where you solidify how you stand apart. 

Set a pricing strategy

Each stage has a potential impact on your pricing. The introduction stage is all about positioning against competitors and trying to offset development costs. Growth can go any number of ways depending on availability, additional features, support, and other benefits. Maturity and saturation may be directly impacted by competitors, leading to further advancements and price decreases.

The decline stage will almost ensure a price decrease or a return to the introduction stage with a new version of the product. This will  start the pricing conversation  all over again, with the performance of the original product directly influencing your initial price position. The better you understand where your product sits in the cycle, the better you can prepare and adjust pricing when necessary. 

Create a marketing strategy

The performance of a product can directly depend on how well you market it. Thankfully, each stage of the product life cycle helps you test and refine your marketing strategy. During the introduction stage, you’re exploring different channels, testing different ad mediums, and working to connect with a target audience. The growth stage is when you’ve refined your channel selection, found winning copy, and streamlined your spending.

The maturity and decline stages are another opportunity to test new channels and adjust your strategy. Maybe you introduce a blog, try selling the product on a channel you avoided with new messaging, or further test copy and image variations to increase your return. 

In any case, each stage presents more opportunities to research and test new concepts that help solidify your  marketing strategy . 

Extend or vary product use

Knowing the stage your product occupies and what comes next can help you better prepare to make adjustments. For example, if you’re in the growth stage and begin to see signs of maturity or even decline, you can begin exploring ways to extend the value of your product. As we’ve said before, this could involve doing a refresh, adding on additional services, or looking to  tap into adjacent markets . 

• What factors affect the product life cycle stages?

How you choose to create, position and market your product are all elements under your control in the product life cycle. However, it’s worth noting that there are external factors that can directly influence how well your product performs and how long it sits in a given stage.

Ease of entry

How competitive the market you’re entering a product into can directly influence its success or failure. It can also influence the number of competitors that attempt to enter the market. If barriers to entry (number of competitors, expenses, market size, technology) are low the product life cycle is more likely to be short. If they’re higher, making entry more difficult, you’re more likely to see an extended product life cycle.

Advancements in technology

If you’re working within an industry or country that experiences a rapid rate of technological advancement (ie. phones, computers, etc), the life cycle of your product is likely very short. On the other hand, some products, locations, and industries only experience limited advancement, meaning that a single iteration may be relevant for far longer.

The key here is to understand how quickly technology changes, what changes are relevant for consumers, and when an iteration will be necessary to stay competitive. A good example of this in action is the  screen resolution of televisions . 

While some, incredibly expensive models, can achieve 8K resolution, the majority of sales and support are focused on 4K resolution. Depending on your market position, it may make sense to be the market leader and focus on high-end sales. On the other hand, if you deal in mid-range televisions and monitors, it likely makes more sense to keep your products at 4K output with a few options for 8K to test if it’s relevant.

Rate of market acceptance

Continuing the TV example, the life cycle of your product also depends on how quickly it’s accepted by consumers. 4K televisions have been available for years at this point, but are only now becoming the baseline. This is due to not only the price of earlier models, but support by streaming services, consoles, traditional cable, and other hardware manufacturers.

This has led to a somewhat lengthy product life cycle. The introduction stage took years for it to officially become accepted by the market. Additionally, the promised replacement of 8K is potentially years away, meaning that the growth and maturity stages might be even longer. 

It’s often viable to explore historical product life cycles to see what the acceptance rate may be. And keep in mind that the benefits of a longer or shorter life cycle fully depend on the stage. If it sits in the introduction stage for too long, you may not see an effective return to cover expenses. However, if you expect it to break into a lengthy growth stage, it may be worth it.   

Economic forces

The actual state of the economy can directly impact the duration of a product life cycle. A sudden dip, brought on by a  global pandemic , for example, may stretch out the introduction phase due to less or selective spending by consumers. On the other hand, the recovery of a financial crisis can also shorten an introductory and even growth phase due to a mass increase in spending.

This is a very broad example, and it fully depends on your target audience, the impact on your industry, etc. Just keep an eye on market trends and note any changes to ensure you’re prepared to adjust accordingly. 

Keep your full product life cycle in mind 

Understanding the product life cycle is a vital part of managing and growing your business. It can help you devise a more detailed roadmap for your business, make better strategic decisions and even help you create more accurate financial forecasts.

If you’ve  created a business plan , make sure that exploring your market position is part of your  regular plan reviews .

You’re likely already looking into everything involved in the product life cycle, but it’s well worth taking the time to solidify what the position of your product is on a regular basis.

Arlene Soto is the director of the Small Business Development Center at Tillamook Bay Community College. She is the former director the Southwestern Oregon Community College Small Business Development Center Director. She is responsible for outreach to Coos, Curry and Western Douglas Counties in Oregon to provide small business development services through free, confidential business advising and low-cost training programs. Arlene has been working with businesses in the accounting field since 1976 and in management since 1988. She is a Certified Management Accountant and a NASBITE Certified Global Business Professional with a Master’s degree in Management from Marylhurst University and a Bachelor’s degree in accounting from Portland State University.

Table of Contents

• Keep your full product life cycle in mind 

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The 6 Stages of the Product Life Cycle [+Examples]

Published: September 14, 2023

When I was 12 years old, I used to be confused about my cousin's CD collection. Why have CDs when I could go on iTunes and listen to all my favorite songs? This is a perfect example of a product life cycle (PLC) in action.

No one wants their product to become “obsolete” and reach the end of its product life cycle. That’s why it’s important to understand what stage your product is in so you can make better marketing and business decisions.

Below, we’ll learn about the product life cycle inside and out. If you’re in a pinch, use the links below to jump straight to what you need:

What is the product life cycle?

What are the stages of the product life cycle, importance of the product life cycle, breaking down the product life cycle theory, product life cycle marketing strategies, product life cycle examples, international product life cycle, when to use the product life cycle.

The product life cycle is the succession of stages that a product goes through during its existence, starting from development and ultimately ending in decline. Business owners and marketers use the product life cycle to make important decisions and strategies on advertising budgets, product prices, and packaging.

In the marketing industry, the typical depiction of the product life cycle only has four main stages — Introduction, Growth, Maturity, and Decline. At HubSpot, we agree that these are vital for a product, but the two stages “Development” and “Decline” aren’t nearly covered enough.

This phase can last for a long time, depending on the complexity of the product, how new it is, and the competition. For a completely new product, the development stage is particularly difficult because the first pioneer of a product isn’t always as successful as later iterations.

Before full-scale production, the product may be released in a limited market or region for testing purposes. This allows companies to assess market acceptance, gather user feedback, and make necessary adjustments before a wider launch.

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2. Introduction

The introduction stage happens when a product is launched in the marketplace. This is when marketing teams begin building product awareness and targeting potential customers. Typically, when a product is introduced, sales are low and demand builds slowly.

In this phase, marketers focus on advertising and marketing campaigns. They also work on testing distribution channels and building product and brand awareness.

This stage is crucial because companies have the opportunity to shake up the status quo and capture the attention and loyalty of early adopters. The positive experiences and word-of-mouth recommendations from these early customers can influence the broader target market and accelerate product adoption.

Some examples of products currently in the introduction stage include:

• Generative AI
• Self-driving cars
• 3D televisions

Ultimately, the success of this stage sets the foundation for the product’s future growth and success in subsequent stages of the product life cycle.

During the growth stage, consumers have accepted the product in the market and customers are beginning to truly buy in. That means demand and profits are growing, hopefully at a steadily rapid pace. This momentum is crucial for sustaining business operations, funding further product development, and generating returns on investment.

As companies scale, they can benefit from lower per-unit production costs, improved supplier relationships, and optimized distribution networks.

However, there are some challenges that come with the growth stage. As the market for the product expands, competition grows. Potential competitors will see your success and will want in.

Some products that are currently in the growth stage are:

• Smartwatches
• Electric cars

During this stage, it’s important to keep attracting new customers and solidify your brand image so you can stay ahead of the competition.

4. Maturity

The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies begin to reduce their prices so they can stay competitive amongst the growing competition. Streamlining production processes, negotiating favorable supplier contracts, and optimizing distribution networks also become important considerations.

This is the phase where a company begins to become more efficient and learns from the mistakes made in the introduction and growth stages. Marketing campaigns are typically focused on differentiation rather than awareness. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive.

During the maturity stage, products begin to enter the most profitable stage. The cost of production declines while the sales are increasing.

• Smartphones
• Video game consoles

5. Saturation

During the product saturation stage, competitors have begun to take a portion of the market and products will experience neither growth nor decline in sales.

Typically, this is the point when most consumers are using a product, but there are many competing companies. At this point, you want your product to become the brand preference so you don't enter the decline stage. To achieve this, you’ll want to focus on providing exceptional service and building strong relationships with your customers.

In a saturated market, innovation also becomes essential to stay relevant. Businesses must continuously invest in research and development to improve products and offer new features. Failure to do so may lead to product obsolescence and loss of market share.

Some examples of products in the saturation stage are:

• Streaming services
• Breakfast cereals
• Soft drinks

Unfortunately, if your product doesn‘t become the preferred brand in a marketplace, you’ll typically experience a decline. Sales will decrease during the heightened competition, which is hard to overcome.

Decline also occurs when products become outdated or less relevant as newer technologies enter the market. Consumers may turn to more advanced options, rendering the declining product less desirable.

If a company is at this stage, it'll either discontinue its product, sell the company, or innovate and iterate on its product in some way.

Here are a few examples of products in the decline stage:

• CDs and cassette tapes
• Landline telephones

The best companies will usually have products at several points in the product life cycle at any given time. Some companies look to other countries to begin the cycle anew.

The product life cycle is important because it informs an organization’s management and decision-makers how well a product is performing and what strategic actions it will take to succeed. This helps companies allocate resources like staff, budgets, shows which products should be prioritized, and where the company should innovate next.

Other benefits of using the product life cycle include:

• Make better marketing investments and decisions
• Easier to make long-term plans
• Allows for better decision making with accurate information on performance
• Easier to streamline current processes within your company

Product Life Cycle Limitations

While using the PLC method certainly helps stakeholders plan, it does have limitations. The cycle breaks down performance over several stages, but unfortunately there is no way to tell how long each stage will last.

Complicating things further, not all products will move through these stages at the same pace. For example, a product may take longer to decline than others. Plus product managers run the risk of not dedicating enough effort and resources into a particular product if they think the product will decline, creating planned obsolescence – even if customers still use it.

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In the late ‘60s, Harvard Business School professor Raymond Vernon developed this marketing theory in response to an economic model that failed to account for trends present in international trade – that’s why it was originally called the international product life cycle theory.

It stated that products developed in an international market had three phases:

• New product
• Maturing product
• Standardized product

Here’s a quick breakdown of his theory.

Vernon theorized a new product would perform best in its country of origin to keep manufacturing and production costs low. Once the product gained demand, companies could begin exporting to other countries and continue building local production plants in each new location.

Having these local plants would offer the flexibility to make changes to the product without incurring huge costs.

The standardized phase would involve an influx of competitors, which would lead the company to focus on driving down production and manufacturing costs to remain competitive. As the market becomes saturated and a new product gets introduced, the company loses its relevance in its home country and shifts gears to create something new, with the cycle beginning again.

Since then, the product life cycle theory has evolved to focus less on geography and more on marketing. Let’s dive into it next.

You can use this template to map out your own product's life cycle phases.

Download the Free Product Life Cycle Template

Now that we’ve discussed the different stages of the product life cycle, let’s explore how to market products in each stage.

Development Stage Marketing Strategy

While marketing typically begins in the introduction stage, you can begin to build “buzz” around your product by securing the endorsement of established voices in the industry.

You can also consider a limited release of the product to a select group of customers or in a specific market segment. This exclusivity can create a sense of anticipation and urgency among potential buyers.

Then, you can use the feedback from the limited release to publish early (and favorable) consumer research or testimonials. Your marketing goal during this stage is to build upon your brand awareness and establish yourself as an innovative company.

Introduction Stage Marketing Strategy

This is where the fun begins. Now that the product is launched, you can actually promote it using inbound marketing and content marketing .

Consider collaborating with influencers or industry experts who have a strong following and influence in your target market. Encourage them to review and promote your product through blog posts, vlogs, social media posts, or sponsored content. Their endorsement can help generate credibility and reach a wider audience.

Education is vital in this stage. If your marketing strategies are successful, the product goes into the next stage — growth.

Growth Stage Marketing Strategy

During this phase, marketing campaigns often shift from getting customers’ buy-in to establishing a brand presence so consumers choose them over developing competitors.

One way to do this is by allocating resources to digital marketing channels like social media advertising, search engine optimization (SEO), content marketing, and influencer partnerships. Then, leverage data analytics to target and reach your ideal customers effectively.

Additionally, as companies grow, they'll begin to open new distribution channels and add more features and support services. Consider partnering with retailers, entering new markets, or exploring e-commerce platforms to reach a wider customer base. In your strategy, you’ll advertise these as well.

Maturity Stage Marketing Strategy

When your product has become a mature offering, you may feel like you’re “sailing by” because sales are steady and the product has been established. But this is where it’s critical to establish yourself as a leader and differentiate your brand.

Consider sharing valuable and educational content, such as blog posts and industry insights, to position your brand as an authority. Educate potential customers about the benefits and value they can gain from your product.

Continuously improve upon the product as adoption grows, and let consumers know in your marketing strategy that the product they love is better than it was before. This will protect you during the next stage — saturation.

Saturation Stage Marketing Strategy

When the market has become saturated, you’ll need to focus on brand awareness and differentiation.

Identify specific customer segments within your market and tailor marketing efforts to appeal to their specific needs and preferences. Refine your messaging and positioning to resonate with each segment, allowing for a more targeted and efficient marketing approach.

You’ll also want to focus on retaining and strengthening relationships with your existing customers. Consider creating a personalized customer service experience and introducing new product features, loyalty programs, packaging options, or bundling with complementary products.

Competition is highest at this stage, so it’s critical to leave no doubt regarding the superiority of your product.

If innovation at the product level isn’t possible (because the product only needs minor tweaks at this point), then invest in your customer service and use customer testimonials in your marketing.

Decline Stage Marketing Strategy

While companies would want to avoid the decline stage, sometimes there’s no helping it — especially if the entire market reached a decline. In your marketing strategy, you can emphasize the superiority of your solution to successfully get out of this stage.

To extend the product life cycle, successful companies can also implement new advertising strategies, reduce prices, add new features to increase their value proposition, explore new markets, or adjust brand packaging.

Unfortunately, not every company is successful at pivoting their product out of the decline stage. If the product is obsolete or financially unviable, it may be best to plan for an orderly exit from the market.

Now that we’ve gone through stages and history, let’s review some real-life examples of them in action.

• The Typewriter
• Floppy Disk

Let’s follow the product life cycle of popular products that have since reached the decline stage.

1. The Typewriter

The typewriter was the first mechanical writing tool — a worthy successor to pen and paper. Ultimately, however, other technologies gained traction and replaced it.

• Development: Before the first commercial typewriter was introduced to the market, the overall idea had been developed for centuries, beginning in 1575.
• Introduction: In the late 1800s, the first commercial typewriters were introduced.
• Growth: The typewriter quickly became an indispensable tool for all forms of writing, becoming widely used in offices, businesses, and private homes.
• Maturity: Typewriters were in the maturity phase for nearly 80 years, because this was the preferred product for typing communications up until the 1980s.
• Saturation: During the saturation stage, typewriters began to face fierce competition with computers in the 1990s.
• Decline: Overall, the typewriter couldn't withstand the competition of new emerging technologies, and eventually the product was discontinued.

Skipping forward to the 21st century, we see the rise and fall of Vine, a short-form video-sharing app that was the source for many memes at its peak but eventually declined due to other platforms.

• Development: Vine was founded in June 2012 and mainly competed with Instagram.
• Introduction: The app was introduced to the public in 2013. Its differentiating factor was its short-form video format — users had only seven seconds to film something that was hilarious, absurd, or a mixture of both.
• Growth: Only two years after its release, Vine had over 200 million active users. Its popularity led to the advent of the phrase “Do it for the Vine.”
• Maturity: Because it was only in the market for a few years, Vine never reached the maturity stage. While adoption was high, it was still a fairly new app.
• Saturation: Vine competed in an already saturated market. Instagram, Snapchat, and YouTube were the pre-eminent names in their category, and Vine soon started to decline in use.
• Decline: When Musical.ly was introduced, Vine lost a large amount of its user base and shut down. It was succeeded by Byte, a similar short-form video-sharing platform, but none of these have been able to surpass TikTok, which launched months after Vine’s end in 2016.

3. Cable TV

Remember the days of switching TV channels to find what to watch? I do — and they feel distinctly like something of the past. While cable TV is still around, it’s safe to say that it’s nearing the decline stage.

• Development: Cable TV was developed in the first half of the twentieth century. John Walson has been credited with its invention.
• Introduction: The first commercial television system was introduced in 1950, and by 1962, the technology saw the first hints of growth.
• Growth: After a decades-long freeze on cable TV’s development (due to regulatory restrictions), the technology began gaining traction, and by 1980, more than 15 million households had cable.
• Maturity: Cable TV matured around the 1990s. Around seven in ten households had cable.
• Saturation: The start of the 21st century saw an oversaturation of this technology, and it also started to compete with other modern developments such as on-demand services and high-definition TV (HDTV). While the internet was still in its nascent stages, it would soon gain on cable TV as well.
• Decline: From 2015 onwards, cable TV experienced a marked decline . Online video streaming services such as Netflix and Hulu have taken precedence — and this trend is set to continue.

4. Floppy Disk

This relic was once a popular and convenient way to store and share data between computers. I barely understood what they were growing up, and it astounds me to think of the very existence of cloud data sharing and other mass memory storage means.

• Development: The first floppy disk was developed in 1970 by IBM engineers. It was an 8-inch flexible magnetic disk in a square case with 2MB storage capacity.
• Introduction: It was introduced in 1971 and largely became known as the only way to transfer or store data.
• Growth: The floppy disk was majorly used in the 1980s-1990s.
• Maturity: Sold well in the market during the 1990s. Improving with time, it could hold 200MB of storage.
• Saturation: Major competitors emerged at the beginning of the 21st century. The invention of USB cables, external hard disks, and CDs gave people options to store their data.
• Decline: The floppy disk faced a major decline up to Hewlett-Packard stopping production for the disk in 2009. The storage capacity for other products in the market grew to be more efficient. Data storage evolution has grown to the point where floppy disks are simple relics.

Not all products need to face the decline stage. Companies can extend the product life cycle with new iterations and stay afloat as long as they have several products at various points of the product life cycle.

The international product life cycle (IPL) is the cycle a product goes through in international markets. As products begin to mature and companies want to avoid the decline stage, they'll typically begin to explore new markets globally.

When products reach mass production, manufacturing and production shift to other countries as well.

The international product life cycle stages are identical to that of a normal product life cycle. The development stage looks different, however, because local customs and regulations can affect how long it takes to bring the product to a new marketplace.

However, once you lay the groundwork in a new marketplace, your competitors will be sure to follow, and the life cycle stages will continue up until saturation and eventually decline. Your option is to either expand into another market or learn from prior mistakes and innovate before the decline stage rolls around.

Next, we’ll look at when you should use the product life cycle.

Businesses use the product life cycle to achieve the following:

• Establish competitive authority. If your product is new and recently introduced to the market, you can advertise it as a new and improved alternative to an existing product. If the product is established, you can vouch for its long history of use in your branding.
• Decide on a pricing strategy . Depending on the life cycle stage your product is in, you’ll choose how to price the product. A new product may be priced lower to entice more buyers, while a product in the growth stage can be priced higher.
• Create a marketing strategy . Your product life cycle stage will determine which strategy to pursue. Maturity and audience knowledgeability play a big role in the type of content you publish on your site and social media profiles.
• Respond before the product begins its decline. There’s no worse feeling than watching your product slowly become obsolete or be displaced by a competing product. By keeping the life cycle stages in mind, you can create a strategy that keeps you ahead of the curve as you reach the saturation and decline stages.

The product life cycle benefits businesses because they can shift their wording and positioning to best market the product at the stage it is in. If your product has recently been introduced and you try to market it as a long-established solution, consumers will see right through it and trust you less as a result.

Keep Your Product’s Life Cycle in Mind

Whether you're developing a brand new product or working with a mature, well-established brand, you can use the product life cycle stages as a guide for your marketing campaigns.

Each stage will dictate how you inform your audience about the product, how you position your brand in the marketplace, and how you decide to move forward after the decline stage.

By keeping your product’s life cycle in mind, you can invest in better marketing campaigns that result in a higher ROI.

Editor's note: This post was originally published in January 2020 and has been updated for comprehensiveness.

This article was written by a human, but our team uses AI in our editorial process. Check out our full disclosure to learn more about how we use AI.

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Product Life Cycle Management Guide: What It Is & 4 Stages

Harold Fernandes is a multipotentialite and has worked on the product side and engineering side of multiple startups. He has led software, testing, and UX teams for over 20 years. He is also an international award-winning author and speaker, a certified mindfulness coach, a musician, and a bibliophile. He is at his happiest doing something new!

The second your product has hit the market, the race to gain (and keep!) market share has already begun.

Product life cycle management (PLM) exists because product managers , start-up founders, and business owners worth their salt know that there are few jobs as challenging as product management. And no wonder: the statistics on new product launches are scary. Somewhere between 80% to 95% of new product launches fail! Interestingly, this is similar to the failure rate of TSA agents trying to prevent crazy stuff from getting onto planes . I’m not sure which is scarier.

These crazy numbers are the primary reason large, established organizations prefer to acquire new products by paying a huge premium to buy out a successful start-up. The alternative—attempting to build one from scratch—is much riskier. For instance, when Google purchased YouTube for USD 1.5 billion back in 2006, everyone said they were paying a crazy amount for YouTube, and that they would never be able to recover their investment, let alone make money from it. Today, YouTube is as big as Netflix . Homegrown cat videos are giving Big Studio blockbuster movies and TV shows a run for their money! 😉

Building a product from scratch or handling a fledgling product may be super tough, but (surprise, surprise!) managing an established product isn’t any easier.

This is why agile product life cycle management methodologies like The Lean Startup by Eric Ries are part of the required reading list for all product managers. These agile product life cycle management philosophies attempt to move the needle towards the science side of the art vs science product success spectrum. 

Here’s what I’ll cover in this article:

What Is Product Life Cycle Management?

• Product Life Cycle Stages

The Importance Of Managing The Product Life Cycle

Integrating your plm system with the rest of your business.

• Difference Between The Product Life Cycle And The Project Life Cycle

Let’s take a look at product life cycle management and the history of product life cycle management as well.

Product life cycle management is a comprehensive framework that product companies use to manage a product through the phases of the product life cycle. 

PLM is a product management process that encompasses all aspects of a product including managing, planning, design, manufacturing, marketing , resources, and people, as well as the software that goes along with each of these aspects. It is an umbrella term that means different things to different organizations. Today several software companies offer PLM software products and solutions that help product managers handle decision-making on processes like pricing and marketing strategy. PLM is now synonymous with the PLM software systems that help manage the product life cycle. Let's look at the history of PLM to gain some perspective.

Related Read: 10 Best Product Lifecycle Management (PLM) Software In 2023

The History Of Product Life Cycle Management

Product life cycle management began in the 1980s as an attempt by the American Motors Corporation (AMC) to compete against its beefier rivals Ford and General Motors, who had larger revenues and bigger budgets. Talk about a David and Goliath story!

The smart folks at the AMC took the following approach:

• Focused their R&D efforts on enhancing the lives of their existing best selling products that were in the maturity phase of the life cycle
• Used computer-aided design (CAD) to speed up product design and development efforts
• Stored all product data and designs centrally (in a PLM software system), allowing for quicker communication, version management, and conflict resolution

You may be thinking — BIG DEAL, my 10-year-old kid can do all this! Your thinking would be correct — today. In 1985, however, all this was bordering on the revolutionary. Remember, it was a time of spandex, hair bands, and boxy computers that filled small rooms and cost tons of money. Personally, I’m ambivalent about sports utility vehicles, but I love Van Halen and Def Leppard — the pre-eminent bands of that era IMO — so it evens out. 😉

The result of all this effort was great for AMC as they ended up kicking competitor butt-er-flies.

They launched new variants of Jeep, created a new market segment for vehicles called sports utility vehicles (SUVs), and finally got bought out by Chrysler who used these new techniques to reduce their development cost structure to 50% of that of the competition. 50% reduction is insane by any standards.

Still, the red queen rules supreme . Toyota came along later and ate everyone’s lunch, and today Elon Musk’s Tesla seems to be the king, with a larger market cap than that of the 6 largest car companies combined !

The Stages Of The Traditional Product Life Cycle

At the heart of product life cycle management resides the product life cycle. A given product moves through the product life cycle during its lifetime. The product life cycle begins after the development stage—when the product is launched into the market—and ends when the product reaches end-of-life and is taken off the shelves, physically or virtually.

By studying the traditional product life cycle, we’re attempting to improve our chances of success at the game of product management. Like every attempt to model reality, the product management life cycle is not perfect. It is, however, a good approximation and more importantly, useful for product managers trying to ride the beast . 

The traditional product life cycle consists of 4 stages: 

• Introduction Stage
• Growth Stage
• Maturity Stage
• Decline Stage

There are some variants to this which consist of 5 product life cycle stages or even 6 stages, but since we’re discussing the traditional product life cycle, we’re going to stick to 4 stages. 

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Product Life Cycle Phase 1: Introduction Stage

The introduction phase of the traditional product life cycle begins with the actual launch of a product. The effort involved in researching, designing, and building the product is not tackled here. Introducing a product is a highly specialized, expensive affair and typically no one talks about profit. Instead, the focus is on advertising, sales, and distribution.

This phase is akin to a plane taking off: take-off is among the riskiest parts of air travel, second only to landing. Similarly, getting a launch right is critical for the success of a new product. 

The first buyers of a new product are typically early adopters. These are the ones who often want to be seen as having something no one else has: your brand-new product. They are usually willing to put up with some flaws if the basic premise of the product is sound. As a product manager, during the introduction phase, you will be busy:

• Creating awareness in the market and clarifying features and benefits to the marketing and sales teams. In a start-up, that might mean talking to that one person who is the “marketing and sales team.”  Be aware that having been up close and personal with a product can cause one to miss simple yet valuable benefits and features.
• Getting more insight into how customers are using your product. You may have spent top dollar on market research and trials during product development . Now it’s time to see if all that time, money, and effort has resulted in a product that customers are willing to buy. Customers will use your product in ways that you never imagined and perceive benefits that were never intended. They may also get irritated by some of your “features.” This is the time for you and your team to uncover all that and to add or modify features to increase sales.

If the new product is a disruptive innovator, then ensuring that it gains maximum traction in the market becomes a critical task. Capturing market share means that copycats find it that much more difficult to gain traction.

Product Life Cycle Phase 2: Growth Stage

Once a product has been successfully introduced into the market and has survived, it reaches the growth phase. This is good news because it means that people want the product and are willing to pay for it! It also means you'll need to ramp up your marketing efforts. The focus in the growth phase is on rapidly gaining new customers and increasing market share as quickly as possible. Existing users might promote your product by using it or talking about it, which is great because word-of-mouth is the best possible promotion strategy.

The primary challenge in this stage is to orchestrate the marketing strategy, prices, new features, and increase capacity and distribution so that there are no hiccups to acquiring new customers. However, being too cautious means that competitors can grab market share.

Having a high growth rate can cause other challenges. Products have fallen flat simply because the demand was too high, the product was not available on the shelves, or the server infrastructure crashed due to high loads. Nothing is worse than having an amazing product with great demand and then failing to successfully meet that demand. This happens more frequently than you can imagine, so work hard to avoid this! Apple has been rumored to create artificial shortages to increase customer appetite, but I suggest you wait for your company to reach USD 2 trillion in the market cap before trying this strategy. As a product manager, during the growth phase, you will need to:

• Grab market share as quickly as possible by pulling out all the stops: new features, advertising, marketing campaigns, adoption , and leveraging available distribution channels
• Ensure that demand does not outstrip supply by a large margin
• Keep an eye on competing products and optimizing the price to ensure your product remains competitive while protecting your profit margins

Product Life Cycle Phase 3: Maturity Stage

The beginning of the maturity phase of the product life cycle is marked by a reduction in the rate of growth. At this stage of the life cycle, sales grow very slowly or reach a plateau. The maturity stage is typically the longest phase for most successful products, and many of the products that you currently use are most likely to be in the maturity phase.

In the maturity phase, the product marketing strategy is focused on differentiation from competing products . Typically, a product manager reduces prices to ensure maximum sales and competitiveness. A market-leading product may experience maximum profitability at this stage while #2 or #3 products typically experience reductions in profit due to price reduction and competition.

A smart product manager will figure out ways to introduce product variants at the end of the maturity stage to increase the length of the maturity phase. A major challenge with the variant strategy is cannibalization – the new variant may eat into the sales of the existing variant. 

Often there is no way around this, but a smart marketing strategy with proper differentiation that addresses different market segments or new markets can help reduce or even eliminate cannibalization. As a product manager, during the maturity phase, you must:

• Maximize profits by reducing costs. This will involve increasing the efficiency of your production, supply chain, and distribution operations.
• Maximize the length of the maturity phase by differentiating the product, adding new features, managing pricing, and keeping competitors at bay.

Product Life Cycle Phase 4: Decline Stage

All products inevitably reach the decline phase of the product life cycle. A market-leading product may last longer than others, but it too will reach market decline . There are multiple reasons for a declining product including:

• Changes in technology
• Market saturation
• Product innovation coming in from around the world
• Changing habits and attitudes of newer generations of consumers
• Planned obsolescence to ensure that customers buy newer models as replacements. There is a lot of debate around whether this approach is ethical, and the impact it has on our planet.

The start of the decline phase is marked by a reduction in sales figures. There is often no way to alter the destiny of the product without dramatically altering the product’s features or market segment. To deal with decline, companies typically have multiple product offerings in various stages of the product life cycle to ensure that revenues don’t decline.

Here are some of the ways to address decline:

• Address a different market segment or market altogether (international markets are a great way to do this)
• Add new features to make it a new-ish product
• Reduce prices, clear out the existing inventory, then put the product in end-of-life and discontinue it

Supporting existing products that are at end-of-life or end-of-support can be challenging and add to costs. Helping existing customers that are still using such products to upgrade by offering discounts is a good strategy to wind down the older product and cut down on support costs.

As a product manager, during the decline phase, you will need to:

• Figure out ways in which you can pivot the product to a new market segment or even a new market altogether
• Manage the end-of-life stage of the product and ensure that you meet all legal commitments while keeping costs to a minimum
• Upsell existing customers to newer products/variants

Having a deep understanding of the various stages of the product life cycle is important when it comes to developing new products. Knowing the stages helps in determining the feasibility and viability of a new product . 

You will be better able to answer these questions: 

• Is it worth building this product? 
• Will it survive in the market? 
• If it does survive, when can we expect to make money off of it? 

Typically, in an agile product life cycle, a product manager can run a series of small experiments to get answers to these questions. Here are some reasons why the product life cycle is important. 

Related Read: Why Is Product Management Important?

Estimation, Planning, And Forecasting

Once you’ve decided that a product is feasible and that it is worth going ahead with, then comes the next stage: product planning and forecasting. This is where in-depth knowledge of the product life cycle can assist in making plans and preparing forecasts for revenue, margins, market size, and customer base.

There is a school of thought that says that all this planning is in vain since no one has a clue about whether a product will succeed. However, the very act of working on a product roadmap by planning, estimation, and forecasting forces a product manager to think hard, ask difficult questions, and examine hidden assumptions that are unaddressed. Forewarned is forearmed.

Additionally, I don’t know of a single executive leadership team in any organization that has approved large product budgets relying only on the product manager’s say-so and hunches, so it is a necessary exercise anyway.

Personally, I always prefer an appointment with my dentist to a budget approval process, but if you come across such an executive team, be sure to let me know! I’ve taken a large sip of my elixir of immortality, just in case.

Marketing Planning And Approach

Different stages of the product life cycle require specific marketing approaches. For instance, in the introduction phase, customers have no clue about the product, so marketing needs to introduce the product to potential customers and educate them about its benefits. 

During the maturity phase of the product, marketing primarily relies on product differentiation to promote sales. When products approach end-of-life, discounts and rebates are often offered which attract customers who would not otherwise have bought that product.

Related Read: 10 Best Product Marketing Tools For Your Marketing Strategy [2023]

Communication Between Teams

Product management requires a multidisciplinary approach including design, engineering, marketing, sales, and support just to name a few. Working with multiple teams invariably brings about the challenge of communication and coordination.

The benefit of the product management life cycle is that it allows all teams to work with a unified paradigm so that it is easier to coordinate for success.

Concurrent Product Development

All products reach the end-of-life phase. Therefore, it is important for companies to have a pipeline of concurrent products to ensure that they maintain or increase levels of revenue and market share.

At the same time, it is important to ensure that new products do not cannibalize existing ones. The product management life cycle helps to synchronize product development to optimize the life of each product in its product portfolio .

No PLM software can operate in isolation, in a silo. While a PLM system is perhaps the keystone of a product company , the other pillars — enterprise resource planning (ERP), customer relationship management (CRM), computer-aided design (CAD), supply chain, communications, and storage infrastructure — need to be tightly integrated with the PLM system to make it a globally optimal system. 

To take a simple example, even if your PLM system is top-notch, if it is not integrated with your suppliers and ERP, it will be hard to get the product to market on time.

Likewise, without a solid CRM system in place, it will be hard to provide the kind of service levels that get customers to recommend your product. Bad word-of-mouth can deep-six a product faster than you can say customer relationship management.

The details of how to integrate multiple complex systems like PLM, ERP, and CRM requires several books worth of content so we will only discuss an overview:

SCENARIO 1: You already own systems like ERP and CRM from different vendors with different platforms like Windows or Linux. Even if you're happy with each system, getting them together can sometimes be like trying to herd cats. Your best bet here is to get a good systems integrator to get all these systems to talk to each other. 

SCENARIO 2: You're a successful start-up growing rapidly and have a green field in front of you. There is an opportunity to start on the right foot and save a ton of headache down the line by ensuring that the parts you set up fit well like a jigsaw puzzle. Typically market-leading products (ERP, CRM, etc.) in each category will be from different vendors so there are difficult decisions and trade-offs to be considered. Is interoperability more important than functionality?

The long and the short of it is that integrating these large, complex, and diverse software systems is difficult and there is no “one-size-fits-all” approach or solution. Even the best industry standards may not be a good fit for your specific organizational scenario. Keep your eyes open and ask a lot of tough questions.

The Difference Between The Product Life Cycle And The Project Life Cycle

There is often confusion about the difference between the product life cycle and the project life cycle. I’ll attempt to clear some of the confusion around this topic:

• A project is defined as an endeavor undertaken to create a service, product, or result. The project life cycle has a definite beginning and end with a clearly defined scope and resources.
• The objectives of the project life cycle and the product life cycle are quite different. A project is used to achieve a pre-defined outcome that may or may not be a product. 
• The product life cycle may use many projects to achieve its goals, but the reverse is usually not true.

Life After Product Life Cycle Management

Like the proverbial product cycle that keeps going, thanks to an overlap between mature products and those in development, a product manager’s job is never done. PLM and the product life cycle are a necessary part of a product manager’s toolkit , especially since they help generate a semblance of order out of the chaos of the market. What has your experience been with PLM systems and processes? What is your opinion of the utility of the product life cycle? In what way did it help you? Let me know in the comments below! 

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Share this with someone who wants to get started on their PM career! Here's a bonus podcast to help them: How To Transition Into Product Management (With Elise Fox From Chegg) 

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What is a product life cycle?

Last updated

3 April 2024

Reviewed by

At its core, the product life cycle is a model that describes the various stages a product goes through, from its introduction to its eventual decline. It is a fundamental principle of marketing that plays a vital role in the success of a product.

Market research is done first to help businesses make informed decisions about when to invest in a product, scale back production, and introduce new products to the market. By understanding the results of market research, businesses can stay ahead of the curve and ensure their products remain relevant and profitable.

This article will dive deep into the product life cycle and explore everything you need to know about this essential concept. We'll help you understand how products evolve, cover the four key stages of the product life cycle, and explain strategies you can use to navigate each stage. In addition, we’ll show you how and when market research plays a key role in decisions throughout the process.

Market analysis template

Save time, highlight crucial insights, and drive strategic decision-making

• What are the stages of the product life cycle?

A product goes through four distinct phases over its lifetime:

Introduction

Before you introduce a product to the market, it’s essential to research that market. Put simply, market research is done as a step before the product cycle. Let’s look at each of the four stages of the product life cycle in detail, plus the pre-stage of market research.

Market research

When companies have a new concept they want to produce and sell, it’s rare for them to simply develop it and send it to market without carrying out research.

This research involves:

Looking into competitors

Reviewing market history

Identifying opportunities

Developing prototypes to test with real-life would-be customers.

The goal of this research step is to verify whether there is ample opportunity for success, eliminate risk as much as possible, and go into the product life cycle with a degree of confidence.

Introduction stage

During this crucial stage, the product is first introduced to potential customers. The company must work to generate interest, build brand awareness , and establish a market presence. The introduction stage focuses on educating consumers about the product and its benefits while establishing distribution channels to make it easily accessible.

One of the most important elements of the introduction stage is pricing. Companies must set an introductory price that balances attracting sales with recouping costs of product development , research, and marketing.

Pricing can benefit from work done in the market research phase by understanding how competitors are pricing similar products. It's also crucial to ensure the price is competitive and reflects the product's exclusivity or novelty. A high price may deter potential customers, while a low price may create the impression of low quality or value.

Marketing and promotion are essential during the introduction stage. Companies must develop marketing strategies that create buzz and generate interest in the product, such as social media campaigns, influencer marketing, and product demonstrations. With careful planning and execution, the introduction stage can set the product on a path to success, laying the foundation for growth and profitability in the later stages of the product life cycle.

Examples of products at the introduction stage include:

Electric cars

Virtual reality headsets

Smart home assistants like Amazon Echo and Google Home

Growth stage

The growth stage is characterized by an increase in sales and profits. During this stage, the product gains wider market acceptance, and consumer awareness and interest continue to grow. Following histories of similar products identified in the market research phase can help establish realistic expectations. The company may also introduce new variations or improved versions of the product to meet customer needs and preferences.

Marketing and promotion remain important during the growth stage, but the focus shifts to increasing market share and brand loyalty. The company may increase production and distribution efforts to meet rising demand and expand the product's availability. The pricing strategy during the growth stage may be adjusted to capitalize on the product's success, with the company increasing or decreasing prices depending on market conditions.

As the product gains wider acceptance, competition may increase, and the company may face challenges from new entrants or established competitors. Market research can come back into play to help the company to learn how best to differentiate the product further or improve its features and benefits to stay ahead of the competition.

Overall, the growth stage is a positive period for the product and the company, but it is also a time of increased competition and evolving customer needs. The company must continue to:

Invest in market research, marketing, and promotion

Innovate the product

Adjust pricing strategies to maximize profits and maintain growth

Examples of products at the growth stage include:

Smartphones like Apple's iPhone and Samsung’s Galaxy series

Fitness trackers like Fitbit and Garmin

Streaming services like Netflix and Disney+

Maturity stage

The maturity stage is the third stage of the product life cycle, which follows the introduction and growth stages. The product has gained wide acceptance, and sales growth has slowed. Competitors have entered the market, and the focus has shifted at this stage from market penetration to defending market share.

During the maturity stage, the company usually aims to maintain market share and extend the product life cycle as long as possible. They achieve this through marketing efforts such as:

Advertising

Sales promotion

Price competition

Maintaining market share would be impossible without constant analysis of the market itself. The company may also differentiate its product from competitors' offerings by introducing new features or improvements.

The production and distribution processes are usually well-established and streamlined at this stage. The company has developed relationships with suppliers and distributors, and economies of scale have been achieved. This results in lower costs and higher profits for the company.

However, the maturity stage also poses challenges. The market becomes saturated, and the product may no longer be able to command premium prices. The company may face increasing competition, and consumers may start looking for alternatives. If the company fails to innovate and differentiate, sales may decline, and the product may enter the decline stage of the product life cycle.

Examples of products at the maturity stage include:

Laptop computers like Dell and Lenovo

Soft drinks like Coca-Cola and Pepsi

Cars like Toyota Camry and Honda Accord

Tech companies like Apple, Amazon, and Xbox

Decline stage

The decline stage is the fourth and final stage of the product life cycle. During this stage, the product experiences a decline in sales and may eventually become obsolete. There are several reasons for the decline stage, including:

Changing consumer preferences

Increased competition

Technological advancements

As sales decline, the company may choose to discontinue the product or reduce marketing efforts. They may also choose to liquidate the remaining inventory, sell the product to another company, or license it for a fee. Alternatively, the company may attempt to reposition or revitalize the product through product modifications, price reductions, or targeted marketing campaigns.

However, it is often difficult to reverse the decline of a product, especially if the product has become outdated or faces strong competition from newer, more innovative products. Based on market research, the company must decide whether to continue investing in the product or cut its losses and allocate resources to other products or markets.

Not all products go through the decline stage. Some products, especially those in the technology industry, may be replaced by newer, more advanced versions before reaching the decline stage. Other products, such as necessities like food and clothing, may have a relatively stable demand over time and not experience a decline stage.

Examples of products at the decline stage include:

Film cameras

VHS players and tapes

Blackberry phones

• Product life cycle vs. BCG matrix

Just like the product life cycle, the Boston Consulting Group (BCG) matrix is a popular framework used in market research to analyze and manage products in a company's portfolio. While both models focus on product performance, they differ in their approach and purpose.

As we’ve seen, the PLC model divides a product's life into four stages:

The BCG Matrix categorizes a company's products based on their market share and growth rate. The four categories are:

Stars: products with high market share and high growth rates

Cash cows: products with a high market share and low growth rates

Question marks: products with low market share and high growth rates

Dogs: products with a low market share and low growth rates

Both frameworks offer valuable insights into a company's product strategy. The PLC model can help marketers identify when to:

Introduce new products

Invest in marketing

Retire a product

The BCG Matrix can help companies allocate resources based on the potential of their products. Products in the ‘star’ category require continued investment to maintain their growth, while cash cows generate profits that can be used to fund other products.

• Why is the product life cycle important?

Understanding the product life cycle is crucial for businesses to manage their product offerings and optimize their marketing efforts. Here are some specific reasons why the product life cycle is important:

Better understanding of product performance

The product life cycle provides a framework for understanding the performance of a product over time, including its introduction, growth, maturity, and decline. This understanding can help businesses make informed decisions about the product's future.

Strategic planning

Understanding the product life cycle allows businesses to plan their marketing and promotional strategies. Companies can use this framework to identify the appropriate marketing mix for each stage of the product life cycle.

Cost-effective resource allocation

By understanding the product life cycle, businesses can allocate their resources more efficiently. They can focus their efforts on products in the growth or maturity phase, and decide whether to invest in new products or retire existing ones.

Benchmark for comparison

Running market research based on the product life cycle gives businesses a benchmark for comparing the performance of different products. This can help them identify market trends and make strategic decisions about product development.

The product life cycle can help businesses identify new opportunities. They may discover new markets for mature products or recognize the need for innovation to extend the product's life cycle.

• What are the limitations of using the product life cycle?

While the product life cycle model is a useful framework for understanding the typical trajectory of a product in the marketplace, it is not without its limitations.

The good news is that, when done well, market research can fill these gaps. In fact, once you hit a limitation with the product life cycle, this is often a cue to frame the questions you’ll want answered from your market research. The two work in perfect harmony to align your company within the market while building out predictable futures based on data-backed strategies.

Here are some of the key limitations of the product life cycle model:

Not all products follow the same life cycle

While the PLC model provides a general framework for understanding the stages of a product's life cycle, not all products follow the same trajectory. Some products have a much longer or shorter life cycle than others, and some may not experience a decline phase at all.

Limited predictive power

The PLC model can be useful for predicting trends in sales and profits over the short term, but it is less reliable for predicting long-term trends or the success of new products. Other factors, such as changes in technology, consumer behavior, and competition, can significantly impact a product's success.

Ignores external factors

The PLC model focuses on the internal factors that influence a product's life cycle, such as changes in marketing and product features. However, it does not consider external factors that can significantly impact a product's success, such as:

Changes in the economy

Social trends

Regulatory environments

Limited practical application

While the PLC model can provide a high-level understanding of a product's life cycle, it may not provide the detailed insights necessary for making strategic business decisions. Other models and tools, such as market research and customer feedback , may be necessary to fully understand a product's potential and its customers' needs .

• What factors impact a product's life cycle?

Several factors can alter a product's performance and position in the product life cycle, all of which can be monitored with market research. These include:

Market competition: A highly competitive market with many similar products can shorten a product's life cycle as consumers have more options and may switch to a competitor's product.

Technological advancements: Technology plays a vital role in shaping the product landscape. As new technologies emerge, they can render existing products obsolete or less desirable, shortening the product life cycle. However, technological advancements can enable new product features and functionalities, which can extend a product's life cycle.

Consumer preferences: Consumer preferences and needs change over time, impacting a product's life cycle. A popular product that meets consumer needs today may become irrelevant tomorrow, resulting in a shorter life cycle.

Economic factors: Economic factors, such as changes in disposable income, inflation, and market conditions, or global pandemics can impact a product's life cycle. During an economic downturn, consumers may reduce spending, causing a decline in demand for certain products and resulting in a shorter life cycle.

Product quality: A high-quality product that meets customer needs and provides an excellent user experience can extend the product's life cycle, while a low-quality one can significantly shorten it.

Product innovation : Product innovation, including new features, functionality, and design, can extend a product's life cycle by increasing its relevance and meeting changing consumer needs.

Marketing and branding: Effective marketing and branding can help to extend a product's life cycle by increasing brand awareness and customer loyalty .

Understanding these factors and their impact on a product's life cycle can help businesses make informed decisions about product development, marketing, and pricing strategies.

• Ways to lengthen your product's life cycle

In today's highly competitive market, businesses face the challenge of keeping their products relevant and profitable for as long as possible. One way to achieve this is by lengthening the product life cycle. Here are some ways to stretch out your PLC:

Continuously innovate: Continuously improving features, functionality, or design can help maintain its relevance in the market and keep up with the changing needs of consumers. It also helps to address any issues that arise with the product over time.

Expand product line: Expanding the product line by introducing new products or variants can help to keep the product fresh and relevant in the market. This also allows the company to target different consumer segments and address their specific needs.

Improve marketing and promotion: Enhancing marketing and promotion efforts can increase brand awareness and product visibility, making it more likely you’ll attract new customers and retain existing ones.

Build a loyal customer base: Building a loyal customer base through exceptional customer service, product quality, and support can increase the likelihood of repeat business and positive word-of-mouth recommendations, which can help to extend the product's life cycle.

Offer incentives and rewards: Offering incentives and rewards such as discounts, loyalty programs, or product bundles can encourage customers to continue buying the product, which can help to extend the product's life cycle.

Expand distribution channels: Expanding distribution channels to new markets and regions can increase your product's reach and introduce it to new customers, which can help to extend its life cycle.

Embrace sustainability: Focusing on sustainability can position the product as environmentally friendly and socially responsible, appealing to consumers who value these attributes and, in turn, help extend its life cycle.

Lengthening a product's life cycle is an essential strategy for businesses looking to maximize their profits and maintain a competitive edge.

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Using market research to understand the product life cycle is essential for any business that wants to remain competitive and profitable in today's market. By recognizing the different stages of a product's life cycle and adapting strategies accordingly, businesses can prolong the life of successful products and minimize losses for unsuccessful ones.

Moreover, by focusing on the needs and preferences of consumers at each stage of the life cycle, companies can create products that meet evolving demand and stay relevant in a rapidly changing marketplace.

Ultimately, a thorough understanding of the product life cycle can help businesses make more informed decisions about product development, marketing, and distribution, leading to greater success and sustainability in the long run.

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Product Life Cycle: Definition, Stages and Examples

Discover the 4 stages of a product life cycle, what they mean, and how to effectively analyze each phase to optimize your business’s product strategy.

Every product in the retail market goes through four product life cycle stages: introduction, growth, maturity, and decline. Understanding these stages can prevent your hard work from meeting an untimely demise. By mastering product life cycle management, you can identify where your products lose traction and ensure success at each stage. Here’s an overview of the product life cycle stages and some examples to learn from.

What is a product life cycle?

A product life cycle describes the journey of a product from conception to its ultimate departure from the marketplace. During this journey, a product is introduced to a target market, experiences growth, reaches maximum sales, and eventually enters a decline. 

The importance of this journey to the success of a product means large companies sometimes dedicate team members to product life cycle management .

How the product life cycle works

Every product has a life cycle. It’s born into the market, experiences growth spurts and peak popularity, and eventually declines as it becomes outdated. 

Smart businesses closely monitor where their products are in this cycle. For newly launched products, they’ll ramp up marketing to create anticipation. When it hits its prime, they can ease off and focus on maintaining excitement. And as a product starts to fade, they must decide whether to retire it gracefully or revitalize it with new features. 

By assessing these life cycle patterns, companies can make informed decisions about when to invest, pivot, or move on to the next big thing. 

4 stages of the product life cycle

Each product life cycle stage has defining characteristics that apply across different products. Let’s explore these stages in detail:

1. Introduction

This introduction stage involves launching a new item or service to the public and identifying a target market. 

During this stage, you educate potential customers about your new offering to gain market share. Profit margins may be low—or even negative—because you’re likely spending more on manufacturing and marketing than you earn from sales.

Some entrepreneurs call this the development stage, but that term can be misleading. The development stage occurs at the end of the product development life cycle , where a product goes from idea to prototype to commercially available.

In the growth stage, both demand and competition increase. This often involves increased marketing investments, ramping production, growing profit margins, and new distribution channels.

3. Maturity

The maturity phase represents peak sales volume for a product. 

Ideally, this is the most profitable stage, with sales revenue exceeding marketing, manufacturing, and personnel expenses. In well-run companies, the maturity stage can last for years, even decades. It helps to sell products people always need more of, like tires or tissues, or to have an expansive product concept, like a video game franchise with regular sequels. 

Companies extend their maturity phase through continual market research, customer feedback, and new iterations of existing products.

Most products eventually fade from the market, often due to obsolescence or shifting consumer behavior. 

Decline can also occur when a competitor overtakes you with a better value proposition, product quality, or marketing strategy. A product can enter the decline stage though not disappear entirely for some time.

What factors can affect the product life cycle?

External factors can impact the product life cycle for different brands:

• Market saturation. Some companies struggle to transition from growth to maturity when the market is saturated with competitors. Well-financed brands can sometimes wait out this saturation, while others may have to fold due to lack of market share.
• Technological advances. A product can thrive and reach maturity, only to quickly enter decline because emerging technologies have rendered it obsolete.
• Unsuccessful marketing. Great product design may not be enough to push an item to profitability. Sometimes, the public develops a preference for a competitor simply because of better marketing.

How to extend product life

No one wants to see their hard work fade into obscurity. Fortunately, there are several ways to breathe new life into a declining product and generate fresh interest. 

Consider these strategies: 

• Create limited-time releases or seasonal variants to spark artificial scarcity. 
• Bundle declining products with popular new items to boost sales. 
• Implement subscription or replenishment models to automate repeat purchases. 
• Leverage user-generated content and influencer marketing for fresh promotional angles. 
• Experiment with dynamic pricing and promotional offers. 

Smart companies pay close attention to changing customer needs and desires. Evolving your product to align with new trends and demands is critical to fending off a premature decline. With marketing ingenuity and smart product development, you can keep your product in the spotlight indefinitely. 

Customer feedback in the product life cycle

Gathering feedback through surveys, reviews, social media listening, and other channels gives you valuable insight into changing customer needs and desires. 

This voice-of-customer intel is invaluable for steering the product development process . Perhaps your bestseller needs a fresh look or a flavor remix. Or maybe a pattern in reviews suggests it’s time to move on to the next big thing. Either way, involving customers in the process turns them into invested co-creators rather than only buyers. 

Incorporate customer feedback at every stage of the product life cycle. Generating this “micro-feedback” arms you with the right insights as you navigate the life cycle:

• Introduction: Gather initial reactions and identify early adopters
• Growth: Monitor satisfaction and uncover new use cases
• Maturity: Look for ways to refine and improve the product
• Decline: Understand why customers are leaving and what might bring them back

By listening to your customers, you can make informed decisions about product improvements, marketing strategies, and when to pivot or retire a product. 

3 successful product life cycle examples

To understand the importance of product life cycle strategy for a growing business, here are three real-world success stories:

1. Bushbalm

Bushbalm has found great success with its range of “skincare for everywhere” products. 

Company cofounder David Gaylord points out that marketing, shipping, and manufacturing feed off one another during the growth stage. Establishing support services for each of these components can help with a product’s growth.

“If you’re the marketing person, but also the person who’s either shipping or making the product, the more you sell, the more work you have to do on manufacturing or shipping,” Gaylord explains. “So, you realize if you’re successful in marketing, your time goes completely to shipping and manufacturing.”

Tip: Prepare for growth by establishing support systems for marketing, shipping, and manufacturing.

2. Queer Lit

Queer Lit is a UK-based bookseller specializing in LGBTQ titles. 

Founder Matthew Cornford started the business as an online-only retailer. To achieve his ideal maturity stage, he realized he needed to adjust his business model by opening a brick-and-mortar store in Manchester.

Cornford explains how opening a physical store created the opportunity for “an in-face conversation with customers that they don’t want to have online. People want to come in and just talk to you, and they want to open up. … When you’re doing that online, that interaction just doesn’t happen in that way.”

Tip: Be willing to pivot your business model to transition from growth to maturity.

3. Kai Collective

Kai Collective founder and fashion blogger Fisayo Longe had 50,000 blog followers before launching her first fashion line. 

Despite having an audience, the initial product line didn’t sell as expected. “So I thought, OK, how can I give people what they want?” Longe says in an interview about debunking the myth of overnight success . “Let me return to my roots and bring elements of my Nigerian heritage into Kai.”

The second launch was wildly successful. “In 2020, we released our mesh marble Gaia print dress,” Longe says. “It’s become really popular—it sells out, and it’s highly imitated now.” 

Tip: Learn from each product’s life cycle and be ready to reimagine your strategy for future success.

Product life cycle FAQ

How do businesses know when a product has entered the growth stage of the product life cycle.

The growth stage typically involves:

• Branching out to new markets
• Scaling up production
• Expanding marketing efforts
• Hiring more staff

This stage should provide more gross revenue than the introduction phase but may not yield more net profit due to increased investments in marketing and production.

What are some signs that a product is entering the maturity stage of the product life cycle?

The maturity stage is primarily characterized by sustained profit. Products in this phase bring in more money from sales than is spent on operations and marketing.

Is the product life cycle the same for all products and industries?

No, the product life cycle varies among different products and industries:

• New technologies (e.g., solar power, electric cars) might require decades in the introduction phase before entering growth
• Items with sustainable customer demand (e.g., certain food staples) can spend most of their existence in the maturity stage

When evaluating your own product’s life cycle, it’s helpful to compare directly with others in your industry.

Can businesses successfully relaunch a product that has already reached the decline stage of the product life cycle?

Yes, products in the decline stage can experience a renaissance. This happens when customer behavior changes, such as when 21st-century musicians took interest in somewhat forgotten synthesizers from the 1970s and 1980s.

To revitalize a declining product:

• Identify new market segments or use cases
• Update the product with new features or designs
• Reposition the product through fresh marketing strategies
• Consider bundling with other popular products

Remember, understanding your product’s life cycle is critical to making informed decisions about its future in the market.

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Product Life Cycle Explained: Stage and Examples

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

What Is the Product Life Cycle?

The product life cycle is the length of time that a product is available to customers. It starts when a product (a good or a service) is introduced into the market and ends when it's removed from the shelves.

This concept is used by management and marketing professionals to make marketing and sales decisions, such as whether or not to increase advertising, reduce prices, expand to new markets, or redesign packaging. The process of strategizing ways to continuously support and maintain a product is called product life cycle management .

Key Takeaways

• A product life cycle is the length of time from when a product is introduced to the market until it's taken off shelves.
• There are four stages in a product's life cycle: introduction, growth, maturity, and decline.
• A company often incurs higher marketing costs when introducing a product to the market but experiences higher sales as product adoption grows.
• Sales stabilize and peak when the product's adoption matures, though competition and obsolescence may cause its decline.
• The concept of product life cycle helps inform marketing and sales decisions, from pricing and promotion to expansion or cost-cutting.

Investopedia / Xiaojie Liu

How the Product Life Cycle Works

A product begins with an idea. Within the confines of modern business, that idea isn't likely to go further until it undergoes research and development (R&D) . If the business finds that it is feasible and potentially profitable, the product will be produced, marketed, and rolled out.

The life cycle of a product is broken into four stages:

• Introduction

Some product life cycle models include product development as a stage, though at this point, the product has not yet been brought to customers.

Introduction Stage

The introduction phase is the first time customers are introduced to the new product. This stage generally requires that the business make a substantial investment in advertising. At this point, the marketing is focused on making consumers aware of the product and its benefits, especially if it is broadly unknown what the item will do.

During the introduction stage, there may be little or no competition for a product, as competitors may just be getting a first look at the new offering. Even if the business is offering a new product or service in response to another business's sales, the marketing will still be focused on introducing the new product rather than on differentiating it from competitors' products.

Companies often experience negative financial results at this stage. Sales tend to be lower, promotional pricing may be low to drive customer engagement, marketing spending is high, and the sales strategy is still being evaluated.

Growth Stage

If the product is successful, it then moves to the growth stage. This is characterized by:

• Growing demand
• Increase in production
• Expanded availability

The amount of time spent in the introduction phase before a company's product experiences strong growth will vary between industries and products.

During the growth phase, the product becomes more popular and recognizable. A company may still choose to invest heavily in advertising if the product faces heavy competition. However, marketing campaigns will likely be geared towards differentiating its product from others as opposed to introducing the goods to the market. A company may also refine its product by improving functionality based on customer feedback.

Financially, the growth period of the product life cycle results in increased sales and higher revenue. As peer businesses begin to offer rival products, competition increases, potentially forcing the company to decrease prices and experience lower margins.

Maturity Stage

The maturity stage of the product life cycle is the most profitable stage, the time when the costs of producing and marketing decline. With the market saturated with the product, competition is now higher than at other stages, and profit margins start to shrink. Some analysts refer to the maturity stage as when sales volume is "maxed out."

Depending on the good, a company may begin deciding how to innovate its product or introduce new ways to capture a larger market presence. This includes getting more feedback from customers and researching their demographics and their needs.

During the maturity stage, competition is at the highest level. Rival companies have had enough time to introduce competing and improved products, and competition for customers is usually highest. Sales levels stabilize, and a company strives to have its product exist in this maturity stage for as long as possible.

The stage of a product's life cycle impacts how it is marketed to consumers. A new product needs to be explained, while a mature product needs to be differentiated from its competitors.

Decline Stage

As the product takes on increased competition and other companies emulate its success, the product may lose market share . This is when the decline state begins.

Product sales begin to drop due to market saturation and alternative products. If customers have already decided whether they are loyal to the product or prefer those of competitors, the company may choose to not invest in additional marketing efforts. Should a product be entirely retired , the company will stop generating support for it and will entirely phase out marketing and production endeavors.

Alternatively, the company may decide to revamp the product or introduce a next-generation, completely overhauled model. If the upgrade is substantial enough, the company may choose to re-enter the product life cycle by introducing the new version to the market.

Microsoft's decision to sunset Windows 8.1 in January 2023 was an example of the decline stage. Consumers began receiving notifications the year before that Microsoft would no longer support the product and instead would focus resources on newer technologies.

Benefits and Drawbacks of Using the Product Life Cycle

Clarify portfolio of offerings

Better allocation of resources

Positive impact on economic growth

Promotes innovation

Not appropriate for every industry or product

Legal or trademark restrictions

Planned obsolescence

Product or resource waste

The product life cycle better allows marketers and business developers to better understand how each product or brand sits with a company's portfolio. This enables the company to internally shift resources to specific products based on those products' positioning within the product life cycle.

For example, a company may decide to reallocate marketing resources to products entering the introduction or growth stages. Alternatively, it may need to invest more cost of labor in engineers or customer service technicians as the product matures.

The product life cycle naturally tends to have a positive impact on economic growth, as it promotes innovation and discourages supporting outdated products. As products move through the life cycle stages, companies that track the product life cycle can be more aware of the need to make their products more effective, safer, efficient, faster, cheaper, or better suited to client needs.

Despite its utility for planning and analysis, the product life cycle doesn't apply to every industry and doesn't work consistently across all products. Consider popular beverage lines whose primary products have been in the maturity stage for decades, while spin-offs or variations of these drinks from the same company have failed.

The product life cycle also may be artificial in industries with legal or trademark restrictions. Consider the new patent term in the United States, which is 20 years from when the application for the patent was filed. A drug may be adversely impacted by competition when its patent ends regardless of which life cycle stage it is in.

Another unfortunate side effect of the product life cycle is prospective or planned obsolescence. When a product enters the maturity stage, a company may be tempted to begin planning its replacement. This may be the case even if the existing product still holds many benefits for customers and could continue to have a long shelf life. For producers who tend to introduce new products every few years, this can lead to product waste and inefficient use of product development resources.

Product Life Cycle vs. BCG Matrix

A similar analytical tool to help businesses determine the market positioning of a product is the Boston Consulting Group (BCG) Matrix . This four-square table defines products based on their market growth and market share:

• Stars : Products with high market growth and high market share
• Cash cows : Products with low market growth and high market share
• Question marks or problem children : Products with high market growth and low market share
• Dogs : Products with low market growth and low market share

Both systems analyze a product's market growth and saturation. However, the BCG Matrix does not traditionally communicate the direction in which a product will move. For example, a product that has entered the maturity stage of the product life cycle will likely experience decline next; the BCG Matrix does not communicate this product flow in its visual depiction.

There is no direct relationship between where a product sits in the BCG Matrix and where it is in the product life cycle.

Impact on Innovation

Companies that have a good handle on all four stages can increase profitability and maximize their returns . Those that aren't able to may experience an increase in their marketing and production costs, ultimately leading to the limited shelf life for their products.

In 1965, Theodore Levitt, a marketing professor, wrote in the Harvard Business Review that the innovator is the one with the most to lose because so many truly new products fail at the first phase of their life cycle—the introductory stage. The failure comes only after the investment of substantial money and time into research, development, and production. This fact prevents many companies from trying many new ideas. Instead, he said, they wait for someone else to succeed and then clone the success.

Stages Within an Industry

In an established industry, products will exist at all stages of the life cycle, influenced by other products that have recently become available. For example, in television program distribution, OLED TVs are in the mature phase, programming-on-demand is in the growth stage, DVDs are in decline, and the videocassette is extinct.

Prolonging the Mature Stage

Many of the most successful products on earth are suspended in the mature stage for as long as possible, undergoing minor updates and redesigns to keep them differentiated. Examples include:

• Apple computers and iPhones
• Ford trucks
• Starbucks' coffee

All of these products undergo minor changes accompanied by major marketing efforts, which are designed to keep them feeling unique and special in the eyes of consumers.

Examples of the Product Life Cycle

Many brands that were American icons have gone through the entirety of the product life cycle, reaching their decline for a variety of different reasons. In some cases, better management of product life cycles might have prolonged their availability. In others, the company faced steep competition or the product didn't resonate with customers.

Oldsmobile began producing cars in 1897. After merging with General Motors in 1908, the company used the first V-8 engine in 1916. By 1935, the one millionth Oldsmobile had been built. In 1984, Oldsmobile sales peaked, selling more cars in that year than any other year. By 2000, General Motors announced it would phase out the automobile and, on April 29th, 2004, the last Oldsmobile was built.

Woolworth Co.

In 1905, Frank Winfield Woolworth incorporated F.W. Woolworth Co., a general merchandise retail store. By 1929, Woolworth had about 2,250 outlet stores across the United States and Britain, Decades later, due to increased competition from other discount retailors, Woolworth closed the last of its variety stores in the United States in 1997 to increasingly focus on sporting goods.

On April 23, 1985, Coca-Cola announced a new formula for its popular beverage, referred to as "new Coke." Coca-Cola's market-share lead had been decreasing over the past 15 years, and the company decided to launch a new recipe in hopes of reinvigorating product interest. After its launch, Coca-Cola's phone line began receiving 1,500 calls per day, many of which were to complain about the change. Protest groups recruited 100,000 individuals to support their cause of bringing "old" Coke back.

A stunning 79 days after its launch, "new Coke's" full product life cycle was complete. Though the product didn't experience much growth or maturity, its introduction to the market was met with heavy protest. Less than three months after it announced its new recipe, Coca-Cola announced it would revert its product back to the original recipe.

What Are the Stages of the Product Life Cycle?

The product life cycle is defined as four distinct stages: product introduction, growth, maturity, and decline. The amount of time spent in each stage will vary from product to product, and different companies have different strategic approaches to transitioning from one phase to the next.

What Are Product Life Cycle Strategies?

Depending on the stage a product is in, a company may adopt different strategies along the product life cycle. For example, a company is more likely to incur heavy marketing and R&D costs in the introduction stage. As the product becomes more mature, companies may then turn to improving product quality, entering new segments, or increasing distribution channels. Companies also strategically approach divesting from product lines including the sale of divisions or discontinuation of goods.

What Is Product Life Cycle Management?

Product life cycle management is the act of overseeing a product's performance over the course of its life. Throughout the different stages of product life cycle, a company enacts strategies and changes based on how the market is receiving a good.

Why Is Product Life Cycle Important?

Product life cycle is important because it informs management of how its product is performing and what strategic approaches it may take. By being informed of which stage its product(s) are in, a company can change how it spends resources, which products to push, how to allocate staff time, and what innovations they want to research next.

Which Factors Impact a Product's Life Cycle?

Many factors can affect how a product performs and where it lies within the product life cycle. In general, the product life cycle is heavily impacted by market adoption, ease of competitive entry, rate of industry innovation, and changes to consumer preferences. If it is easier for competitors to enter markets, consumers can change their minds frequently about the goods they consume, or the market may quickly become saturated. Then, products are more likely to have shorter lives throughout a product life cycle.

Broadly speaking, almost every product sold undergoes the product life cycle. This cycle of market introduction, growth, maturity, and decline may vary from product to product, as well as from industry to industry.

This cycle can help a company make decisions about resource allocation, track the outlook of products, and strategically plan for bringing new products to market.

Microsoft. " Windows 8 and Windows 8.1 End of Support and Office ."

Food and Drug Administration. " Frequently Asked Questions on Patents and Exclusivity ."

Harvard Business Review. " Exploit the Product Life Cycle ."

Oldsmobile Club of America. " History of Oldsmobile ."

Britannica. " Woolworth Co. "

The Coca-Cola Company. " The Story of One of the Most Memorable Marketing Blunders Ever ."

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