8 marketing strategies depending on the product lifecycle
The product life cycle describes the different stages that a good goes through from its introduction to the market until its possible retirement. Each phase presents unique challenges and opportunities, forcing companies to adapt their strategies to maximize product value. Next, we’ll look at each of these phases and see how companies should adjust their sales and marketing strategies in each phase.
Introduction Phase
The introduction phase is when the product is released to the market. At this stage, product knowledge is limited and sales are often low. It can be costly due to the need for investment in research and development, marketing and distribution. The main objective at this stage is to raise awareness and stimulate initial demand.
Business strategies in the introduction phase:
Intensive marketing: The marketing strategy should focus on generating product knowledge and educating the market about its benefits. This can include aggressive advertising campaigns, digital marketing, launch events, and promotions.
Penetration or Premium Pricing: Companies can opt for a penetration pricing strategy, setting low prices to quickly attract a customer base. Alternatively, they can opt for premium prices if the product is innovative and exclusive, positioning themselves as a luxury or high quality good.
Growth Phase
In the growth phase, the product begins to gain market acceptance and sales increase significantly. Competition often intensifies as more companies enter the market attracted by the initial success of the product. At this stage, the main objective is to expand market share and optimize production.
Business strategies in the growth phase:
Product improvement and differentiation: As competition increases, companies must focus on improving the product or adding new features to differentiate it from competitors. Innovating in design, functionality or after-sales service can be key.
Expansion of distribution channels: In this phase, distribution expands to reach a larger number of consumers. Companies can increase their presence in physical stores, online platforms or even internationalize if market conditions allow it.
Maturity Phase
The maturity phase is the longest stage in a product’s lifecycle. Here, sales stabilize and the market is saturated. Although sales growth slows down, this phase is generally the most profitable, as production costs have decreased and the brand is well established. The main challenge is to maintain market share and protect profit margins against competition.
Business Strategies in the Maturity Phase:
Product diversification and extension: Companies can introduce improved versions or variants of the original product to attract new customers and keep existing customers interested. This may include design modifications, technological improvements, or the addition of new functionality.
Promotions to promote loyalty: At this stage, it’s crucial to focus on retaining customers. Strategies such as loyalty programs, discounts for recurring purchases, or additional services can be effective in preventing the loss of customers to competitors.
Decline Phase
Finally, the product enters the phase of decline, where sales begin to decline due to several factors, such as the appearance of new and more innovative products, the change in consumer preferences or the saturation of the market. The objective in this phase is to manage the decline in the most cost-effective way possible, seeking new opportunities or preparing for the recall of the product.
Business strategies in the decline phase:
Cost reduction: As sales are shrinking, companies should focus on reducing costs as much as possible. This may include the reduction of production lines, the simplification of the product offering or the restructuring of the company.
Promotions to liquidate inventory: A common strategy at this stage is to launch aggressive discounts and promotions to liquidate the remaining stock before removing the product from the market.
The life cycle of a product provides a useful framework for understanding the stages that a good or service goes through in the market. From introduction to decline, each phase requires specific strategies to maximize opportunities and minimize risks.
