Product development
At the product development stage, the product may still be an idea or prototype. At this time, profits and competition are almost non-existent, and investment and development costs may be high. It is advisable to land on a minimum viable product (MVP) as soon as possible.
Market introduction
In the market introduction stage, the product is launched into the market. Marketing and advertising costs are high at this point in the life cycle. Companies will try to create a demand by seeking out a target market. As customers are not yet familiar with the product, profits are still low with little competition. The most crucial task for companies at this stage is to create product awareness.
Growth
As the market begins to accept the product, demand for it increases. With the increase in demand comes an increase in revenue. This may create competition from existing players in the space. At this stage, the product holds a fairly steady market share, and companies may consider increasing their services through upselling. They may need to fine-tune brand messaging or improve product features and are likely still investing heavily in the marketing and advertising of the product.
Maturity and saturation
The company starts to become more efficient at this stage. Production and marketing costs come down significantly. Though growth may no longer be at the same level as before, the company will still be making a profit. Market competitors will be a big challenge to deal with at this stage. Companies may release incremental product upgrades to inspire sales.
Decline
This stage is where most product life cycles eventually end. Increased competition, market saturation, changing demands, and the rise of new technologies cause most products to become irrelevant. Revenues and profits decrease with poor sales while costs increase. If the business cannot tap into new markets, revive the product, or re-engage with former customers, the company may have to discontinue the product.
Understanding the product life cycle is a vital part of product management. Asking yourself, "what are the five stages of product life cycle?" ensures you make the best strategic decisions for your product and company.
