Almost everything in life follows a life cycle as it grows, achieves maturity and then dies.
This is true of products, which have a product life cycle, and of businesses which have a business life cycle.
The Product life cycle is the series of events that sees a new product come into existence, and follows its growth into a mature product, potential expansion, critical mass and eventual decline.
The stages of any life cycle are usually;-
This applies to both products and to businesses .The implication of this for business is that there has to be continual development of new products for a business to remain strong. And there have to be new developments in the business itself to prevent its own decline.
It is important then for business people to be aware of the existence of the life cycle, and to know and understand at what stage in the cycle a product or business is at.
To use an analogy, the same behaviours, tools and techniques are not applicable to looking after a young child as would be used when dealing with a mature adult, and different behaviours are used when looking after an old, infirm person.
In the same way, a business and a product need to be handled appropriately at various points in their life cycle,
In the case of a product, a product manager can take action to extend the life of the product.
In the case of a business, a new business development manager can take action to extend the life of the business. This may involve looking for new products, or markets, or be achieved by mergers and acquisitions.
Product life cycle
These are typical activities in a product life cycle;-
May include concept, product design, testing, market research, focus groups, and market plan. There may be redevelopment due to feedback from market research or focus groups, which will be followed by retesting.
Release of the product, often accompanied by high levels of promotion and advertising.
Sales growth ideally accelerates. Factors such as production levels, gross and net margins, flexibility on selling prices will vary according to competition and the type of product .Costs may decline as production increases, margins may also decline.
Other colours, flavours or sizes may be added to the product line, or the product may be developed by the addition of new lines, such as accessories. If successful, this is where the life cycle of the product can be expanded by the product manager, who can produce a range of products based on a successful product.
The product will reach the peak of its cycle, as product managers are unable to extend it further. It may remain at this point for some time, or may decline sharply. The reason for, and speed of decline will depend on the product. It may be the technology is out of date, or the product is overtaken by new products.
The Product has reached or passed its point of highest demand. It may remain steady at a reduced level, or decline further, until it is obsolete.
The product managers role is to “own “the product, they will create and optimise the life of the product. Product Management is defined differently in nearly every company because is the role is quite wide ranging. Different product types, industry sectors, and company needs define the job responsibilities.
There may also be other roles and titles that overlap or are included in the Product Manager’s role. One of these is Product Marketing. In larger companies, both Product Management and Product Marketing roles will exist, one to create the product and the other to help sell it. In smaller companies, the Product Manager may perform both activities, or there may be a marketing department that covers all activities.
In a small company the business owner or manager will usually fulfil the role of product manager or champion, taking the product to market themselves.
Role of the Product Manager in the life cycle
The Product Manager may intervene in the life cycle at a number of points, to alter its natural trajectory.
Prior to launch, they may alter the product specification in response to poor test marketing.
Once launched, if a product does not produce early sales growth, it may be withdrawn from the market, revamped and launched.
During the growth cycle, adjustments can be made to marketing plans, packaging, distribution, advertising, pricing.
In the latter stages of the cycle the product manager will make the decision to continue to promote a mature or declining product, perhaps by refreshing it , and whether it is more economical to withdraw the product, retire or replace it.
In the case of a successful product the offer can be expanded in a number of ways, by adding sizes and colours for clothing, flavours for foodstuffs. Or there may be a complete range expansion.
A great example of this is Mattel’s Barbie doll. The original product was launched in 1959 as a single doll .Then different hair colours were offered.
The range has been dramatically extended over the years by the addition of different Barbie’s, — teacher Barbie, lifeguard Barbie, ballerina, dentist.
Clothes and accessories were added, appropriate for the career portrayed.
There are play accessories such as cars, houses, horses….
Barbie’s boyfriend Ken was added, then her little sister Skipper
They each have ranges of clothes…………and accessories.
Licensed merchandise is now available including books, bikes and scooters, skates, jigsaws, children’s wear, video games, and lunchboxes.
So from the successful launch of a single doll, Mattel have created one of the biggest and most successful brands in the world, with a huge number of ranges.
This a common theme with children’s merchandise where range expansion is very successful. Again, consider Disney’s Frozen with dolls, toys, lunchboxes, books, children’s wear.
In the adult world, designers produce capsule ranges, perfume, handbags, make-up.
Sports brands, which may originally been known for sports footwear, have moved into leisure clothing and accessories.