The life cycle of a product: definition and example

When a product is released to the market, it goes through several stages. Do you know what the stages of the product life cycle are? What is the product life cycle? Who invented the product life cycle? All the answers are here.

  The life cycle of a product are the stages of the life of a product on the market.

What is the life cycle of a product?

A product has a whole life cycle between its initial release on the market and the very end of its production and its withdrawal from the market. Knowing its life cycle and following tools such as the life cycle curve allows you to follow the evolution of sales. This is a very important tool to penetrate a market and maximize the longevity and sales volume of your products.

The life cycle of a product in marketing

From a marketing point of view, the life cycle of one of your products is useful to refine your strategy. As an entrepreneur or marketer, knowing the stage of your product's life will allow you to adopt a relevant commercial strategy, for example for advertising, packaging or even to define the selling price of your product. The cycle analysis is useful to define the product characteristics, the price, the distribution and the promotion. Indeed, your pricing will not be the same during the launch period, when the product is brand new, as when your product is well established on the market and you need to be competitive.

Life cycle analysis in the circular economy

The circular economy is an economy that aims to be more responsible, with less waste and wastage. In the context of the production of goods, it brings together a set of good practices to optimize the consumption of materials and resources necessary for its manufacture. The circular economy is opposed to the linear economy, in which the production of an industrial product and its consumption operate according to a pattern that consumes resources and generates waste:

• Extract ;
• Produce;
• Consume;
• Throw away.

  Conversely, the circular economy can be thought of as a loop, or cycle. All the steps are reasoned, from the use of materials to recycling, through use. The circle can be infinite between material recycling, consumption and packaging deposit for example. The goal of LCA is to reduce pollution and resource use. Then to communicate these results to build customer loyalty and/or win new prospects. Waste and wastage are reduced during the eco-design process. This is done after the LCA has been carried out.

The life cycle curve of a product

As we can see on the curve, a product goes through different phases between its conception and its final withdrawal from the market. At each stage, the volume of sales and the profit made are not the same. After its launch, the sales of the product gradually increase until it reaches a plateau, in which sales are stable. This is a period of growth before the product reaches maturity. Later, sales may decline until the product is finally withdrawn from the market because it is no longer profitable. If at the time of its release the product has cost the company a lot in investment, its profitability progresses with time: profits increase because production costs decrease. The product is well established on the market and ideally becomes the reference in its niche.

Who invented the product life cycle?

The product life cycle is an old but still used marketing concept. While it is difficult to know who initially conceptualized it, it is notable that authors such as Theodore Levitt and others have worked on the subject. Levitt is a Harvard marketing professor from the 1960s.  

What are the stages of the product life cycle in marketing?

It is generally considered that a product goes through 5 main stages:

• Development;
• Market launch;
• Growth;
• Maturity;
• Decline.

  In the first phase of development, the product is not yet on the market and does not generate profitability. It represents significant costs for the company that develops it. At the time of its launch on the market, the profitability is not yet there. The costs of product development, communication and marketing, in the face of the small sales volume at the beginning of the product life cycle, do not yet allow for profitability. In the third phase, growth, the product starts to be profitable. The sales increase more and more and the product starts to be known by consumers. The product becomes profitable. It gains market share and generates profits. The fourth phase is the maturity phase. At this stage, there is no more sales growth. The product still generates profits, and profitability often continues to rise. Indeed, production costs tend to be amortized and the manufacturing process is under control. But sales stagnate and no longer increase. For the company, this may be the time to renew itself and to market a new product. Many world-famous products marketed by large companies remain in the maturity phase for years or even decades, such as sodas, spreads or fast-food chains. There is sometimes a stage between maturity and decline: the saturation phase. In this period, the market is saturated by equivalent products and competition is tough. You have to be able to hold on and use marketing to avoid falling into the decline phase. Finally, in the decline phase, sales collapse more or less gradually. Both market share and profitability decrease. This decline in sales is a sign that buyers have lost interest in the product, that there is no longer a market to be had, or that another product has taken over the market share of the declining product. Finally, the product is almost always withdrawn from the market when it is no longer profitable and causes losses.   At each stage of the life cycle, marketing is used to trigger sales and raise awareness of the product. The strategies differ according to the phase of the cycle, in order to adapt to it as best as possible. From the research and development phase, even before the product is put on the market, marketing is useful to define the characteristics of the products expected by consumers, as well as the best selling price. Even before the market launch, communicating on the upcoming release of the product favors a short launch phase and a longer growth phase. Marketing your product reinforces the notoriety of the company or the brand, and creates expectations. During the launch or presentation phase, sales increase gradually, or may not even take off. It is during this period that marketing must show its efficiency, in order to communicate favorably, convince buyers and present products in detail. The marketing objective of this phase is to gain market share and increase volumes. Once the product is commercialized, the objective is to remain in the growth phase as long as possible, thanks to marketing in particular, in order to gain market share and be profitable. Generally, marketing campaigns in the growth phase work on the presence of the brand in order to be ahead of the competition in the launch phase. The objective can also be to communicate on the constant improvement of its product to continue to generate new sales. In the mature phase, marketing focuses more on differentiation from the competition than on awareness. The idea is to remain well established in the market, without sales declining. It is indeed essential to establish oneself as a leader in the field. As investments tend to pay for themselves, a common strategy is to lower your selling price in order to remain competitive. If your product is going through a period of saturation, there is a lot of competition and differentiation is complicated. It is in this context that marketing must work to maintain your product as the reference, so as not to be outdated or go into decline. Communicating on the image of the brand to guarantee its superiority, always improving its customer service and its prices allow you to remain the leader. Finally, if your product goes into decline, it is very difficult to reconquer the market with your old product. It will be important to renew yourself. However, it is possible to play on nostalgia, by presenting a revisited version of a cult product that was previously withdrawn from the market but is still known and appreciated by users. Car manufacturers or a cell phone brand use this strategy for new models, inspired by a cult product. This phase of decline is also the phase of preparation for the withdrawal of the range, with follow-up of units still in circulation, after-sales service maintained, etc.

The life cycle of a product in the circular economy

  In the circular economy, the phases of a product's life cycle go through different stages. Indeed, the resources needed for production progress and decline according to the needs of the market and until withdrawal from the market. The stages of the life cycle in circular economy are the following:

• Extraction of raw materials;
• Manufacturing ;
• Distribution;
• Use;
• End of life.

  However, the product is designed from the start to be not only reusable or recyclable, but also to generate less production costs and resource consumption. With controlled design and production, and optimized sales, the product has a more virtuous life cycle with less impact. Even if eco-design differs from a product of the classical economy, the company gains by reducing its resource expenses during production, through eco-design for example. The company's more responsible image is also supported by consumers, for whom prices can be competitive: they can possibly benefit from the savings made during production or from the deposit of packaging for example.

What is the last phase of the product life cycle in marketing?

The last phase of a product cycle in marketing is the decline. In most cases, another competing product replaces the existing one and takes its market share. Very often, innovations in the field concerned make the products of the sector obsolete, even those of references or market leaders. For example, audio cassettes or floppy disks have gone through all the phases of the product life cycle, and are now almost no longer marketed. In this phase of decline, marketing choices are decisive. Either the product is relaunched, focusing on marketing and a complete facelift. The product can be lifted or redesigned, the prices modified or repositioned. It is very important to have anticipated this renewal at the very beginning of the decline phase, or even at the end of the maturity or saturation period. The second possibility is to completely replace the outgoing product with a new one, whether it is a brand new version from scratch or another product. In the same way, it will have been necessary to anticipate this renewal. The last option is to simply withdraw your product from the market at the end of its life cycle. It is still necessary to maintain a follow-up, an after-sales service and other costly management to accompany the end of the product's life and its presence on the market, so as not to harm the brand's image. All this represents a cost, ideally covered by the profits made during the life of the product. Important: in the case of the life cycle of a product in circular economy, the last phase is the end of life, which can be either reuse or disposal (incineration, landfill).  

You now know everything about the life cycle of a product.

To find out more, take a look at the following articles:

‣ FAQs on Life Cycle Assessment ‣ Life Cycle Assessment : definition and example