The Product Life Cycle: The Market Side

The product life cycle can vary depending on how you define it, but as a product manager (PM), understanding the phases of a product's market journey is key to driving its success. In this guide, I'll take you through the four stages of the product life cycle from the market perspective. Products in companies often progress through these stages as they evolve and adapt to the market.

The Four Stages of the Product Life Cycle

1. Introduction

This is the early stage when a product is first launched in the market. At this point, the product has little to no competition and a small customer base, as it’s relatively unknown. Companies might experience losses during this stage due to the initial investment in production, marketing, and promotion, while revenues remain low.

Example: When the first electric cars, like the early Tesla models, were introduced, they had few direct competitors. There were many skeptics, and sales were slow as customers were not yet accustomed to the concept of electric vehicles.

2. Growth

During the growth stage, the product gains market acceptance and sales begin to rise significantly. The company refines the product based on feedback from early customers, improving its features and usability. This stage also attracts competitors as they recognize the product’s market potential, though the original company still maintains an edge.

Example: Smartphones in the early 2010s saw rapid growth. As the iPhone and Android phones gained popularity, companies introduced regular improvements and innovations, such as better cameras and app stores. The market saw new competitors like Samsung and Google entering the fray.

3. Maturity

At this stage, sales reach their peak as the product becomes well-established in the market. The competition also intensifies as more companies launch similar products. While the product is widely accepted, companies need to differentiate themselves from competitors, perhaps through branding, pricing strategies, or minor product innovations.

Example: Today’s smartphone market is in the maturity phase. Major players like Apple, Samsung, and Google all offer similar devices with only incremental differences, and they rely heavily on brand loyalty, ecosystem integration, and marketing to retain market share.

4. Decline

Eventually, the product’s sales start to decline. This happens due to market saturation, changing consumer preferences, or the introduction of superior products that make the original product obsolete. Companies may choose to phase out the product or focus on a niche audience.

Example: DVDs are a good example of a product in decline. With the rise of streaming services like Netflix and digital downloads, the demand for physical DVDs has diminished, and many companies have stopped producing them.

Conclusion

Understanding the product life cycle is vital for developing strategies to maintain a product’s market position. From introduction to decline, the lifecycle helps companies adapt and innovate, whether through improving features during growth, differentiating in maturity, or pivoting when the product enters decline. While these stages provide a framework, the exact timeline of each phase can vary depending on the product, market conditions, and external factors.

In essence, successful product management means constantly assessing where your product stands in the life cycle and being ready to make adjustments to ensure its longevity in the market.