product life cycle essay

• Search Search Please fill out this field.

What Is the Product Life Cycle?

• How It Works
• Limitations

Product Life Cycle vs. BCG Matrix

• Introduction and Maturity

The Bottom Line

• Small Business

Product Life Cycle Explained: Stage and Examples

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

The term product life cycle refers to the length of time from when a product is introduced to consumers into the market until it's removed from the shelves. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging. The process of strategizing ways to continuously support and maintain a product is called product life cycle management .

Key Takeaways

• A product life cycle is the amount of time a product goes from being introduced into the market until it's taken off the shelves.
• There are four stages in a product's life cycle—introduction, growth, maturity, and decline.
• A company often incurs higher marketing costs when introducing a product to the market but experiences higher sales as product adoption grows.
• Sales stabilize and peak when the product's adoption matures, though competition and obsolescence may cause its decline.
• The concept of product life cycle helps inform business decision-making, from pricing and promotion to expansion or cost-cutting.

Investopedia / Xiaojie Liu

How the Product Life Cycle Works

Products, like people, have life cycles. The life cycle of a product is broken into four stages—introduction, growth, maturity , and decline.

A product begins with an idea, and within the confines of modern business, it isn't likely to go further until it undergoes research and development (R&D) and is found to be feasible and potentially profitable. At that point, the product is produced, marketed, and rolled out. Some product life cycle models include product development as a stage, though at this point, the product has not yet been brought to customers.

As mentioned above, there are four generally accepted stages in the life cycle of a product. Here are details about each one.

Introduction Stage

The introduction phase is the first time customers are introduced to the new product. A company must generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits, especially if it is broadly unknown what the item will do.

During the introduction stage, there is often little-to-no competition for a product, as competitors may just be getting a first look at the new offering. However, companies still often experience negative financial results at this stage as sales tend to be lower, promotional pricing may be low to drive customer engagement, and the sales strategy is still being evaluated.

Growth Stage

If the product is successful, it then moves to the growth stage. This is characterized by growing demand , an increase in production, and expansion in its availability. The amount of time spent in the introduction phase before a company's product experiences strong growth will vary from between industries and products.

During the growth phase, the product becomes more popular and recognizable. A company may still choose to invest heavily in advertising if the product faces heavy competition. However, marketing campaigns will likely be geared towards differentiating its product from others as opposed to introducing the goods to the market. A company may also refine its product by improving functionality based on customer feedback.

Financially, the growth period of the product life cycle results in increased sales and higher revenue. As competition begins to offer rival products, competition increases, potentially forcing the company to decrease prices and experience lower margins.

Maturity Stage

The maturity stage of the product life cycle is the most profitable stage, the time when the costs of producing and marketing decline. With the market saturated with the product, competition now higher than at other stages, and profit margins starting to shrink, some analysts refer to the maturity stage as when sales volume is "maxed out".

Depending on the good, a company may begin deciding how to innovate its product or introduce new ways to capture a larger market presence. This includes getting more feedback from customers, and researching their demographics and their needs.

During the maturity stage, competition is at the highest level. Rival companies have had enough time to introduce competing and improved products, and competition for customers is usually highest. Sales levels stabilize, and a company strives to have its product exist in this maturity stage for as long as possible.

A new product needs to be explained, while a mature product needs to be differentiated.

Decline Stage

As the product takes on increased competition as other companies emulate its success, the product may lose market share and begin its decline. Product sales begin to drop due to market saturation and alternative products, and the company may choose to not pursue additional marketing efforts as customers may already have determined whether they are loyal to the company's products or not.

Should a product be entirely retired , the company will stop generating support for it and will entirely phase out marketing endeavors. Alternatively, the company may decide to revamp the product or introduce a next-generation, completely overhauled model. If the upgrade is substantial enough, the company may choose to re-enter the product life cycle by introducing the new version to the market.

The stage of a product's life cycle impacts the way in which it is marketed to consumers. A new product needs to be explained, while a mature product needs to be differentiated from its competitors.

Advantages of Using the Product Life Cycle

The product life cycle better allows marketers and business developers to better understand how each product or brand sits with a company's portfolio. This enables the company to internally shift resources to specific products based on those products' positioning within the product life cycle.

For example, a company may decide to reallocate market staff time to products entering the introduction or growth stages. Alternatively, it may need to invest more cost of labor in engineers or customer service technicians as the product matures.

The product life cycle naturally tends to have a positive impact on economic growth, as it promotes innovation and discourages supporting outdated products. As products move through the life cycle stages, companies that use the product life cycle can realize the need to make their products more effective, safer, efficient, faster, cheaper, or better suited to client needs.

Limitations of Using the Product Life Cycle

Despite its utility for planning and analysis, the product life cycle doesn't pertain to every industry and doesn't work consistently across all products. Consider popular beverage lines whose primary products have been in the maturity stage for decades, while spin-offs or variations of these drinks from the same company have failed.

The product life cycle also may be artificial in industries with legal or trademark restrictions. Consider the new patent term of 20 years from which the application for the patent was filed in the United States. Though a drug may be just entering their growth stage, it may be adversely impacted by competition when its patent ends regardless of which stage it is in.

Another unfortunate side effect of the product life cycle is prospective planned obsolescence. When a product enters the maturity stage, a company may be tempted to begin planning its replacement. This may be the case even if the existing product still holds many benefits for customers and still has a long shelf life. For producers who tend to introduce new products every few years, this may lead to product waste and inefficient use of product development resources.

Notification messages such as Microsoft's alert that Windows 8.1 will sunset on January 2023 is an example of decline. Due to obsolescence of the operating system, Microsoft is choosing to no longer support the product and instead focus resources on newer technologies.

A similar analytical tool to determine the market positioning of a product is the Boston Consulting Group (BCG) Matrix . This four-square table defines products based on their market growth and market share:

• "Stars" are products with high market growth and high market share.
• "Cash cows" are products with low market growth and high market share.
• "Question marks," also known as "problem children," are products with high market growth and low market share.
• "Dogs" are products with low market growth and low market share.

Although there is no direct relationship between the matrix and the product life cycle concept, both analyze a product's market growth and saturation. However, the BCG Matrix does not traditionally communicate the direction in which a product will move. For example, a product that has entered the maturity stage of the product life cycle will likely experience decline next; the BCG Matrix does not communicate this product flow in its visual depiction.

Introduction and Maturity: Special Considerations

Companies that have a good handle on all four stages can increase profitability and maximize their returns . Those that aren't able to may experience an increase in their marketing and production costs, ultimately leading to the limited shelf life for their product(s).

Back in 1965, Theodore Levitt, a marketing professor, wrote in the Harvard Business Review that the innovator is the one with the most to lose because so many truly new products fail at the first phase of their life cycle—the introductory stage. The failure comes only after the investment of substantial money and time into research, development, and production. This fact prevents many companies from even trying anything really new. Instead, he said, they wait for someone else to succeed and then clone the success.

To cite an established and still-thriving industry, television program distribution has related products in all stages of the product life cycle. OLED TVs are in the mature phase, programming-on-demand is in the growth stage, DVDs are in decline, and the videocassette is extinct.

Many of the most successful products on earth are suspended in the mature stage for as long as possible, undergoing minor updates and redesigns to keep them differentiated. Examples include Apple computers and iPhones, Ford's best-selling trucks, and Starbucks' coffee—all of which undergo minor changes accompanied by marketing efforts—are designed to keep them feeling unique and special in the eyes of consumers.

Examples of Product Life Cycles

Many brands that were American icons have dwindled and died. Better management of product life cycles might have saved some of them—or perhaps their time had just come.

Oldsmobile began producing cars in 1897. After merging with General Motors in 1908, the company used the first V-8 engine in 1916. By 1935, the one millionth Oldsmobile had been built. In 1984, Oldsmobile sales peaked, selling more cars in that year than any other year. By 2000, General Motors announced it would phase out the automobile and, on April 29th, 2004, the last Oldsmobile was built.

Woolworth Co.

In 1905, Frank Winfield Woolworth incorporated F.W. Woolworth Co., a general merchandise retail store. By 1929, Woolworth had about 2,250 outlet stores across the United States and Britain, Decades later, due to increased competition from other discount retailors, Woolworth closed the last of its variety stores in the United States in 1997 to increasingly focus on sporting goods.

On April 23, 1985, Coca-Cola announced a new formula for its popular beverage, referred to as "new Coke." Coca-Cola's market-share lead had been decreasing over the past 15 years, and the company decided to launch a new recipe in hopes of reinvigorating product interest. After its launch, Coca-Cola's phone line began receiving 1,500 calls per day, many of which were to complain about the change. Protest groups recruited 100,000 individuals to support their cause of bringing "old" Coke back.

A stunning 79 days after its launch, "new Coke's" full product life cycle was complete. Though the product didn't experience much growth or maturity, its introduction to the market was met with heavy protest. Less than three months after it announced its new recipe, Coca-Cola announced it would revert its product back to the original recipe.

What Are the Stages of the Product Life Cycle?

The product life cycle is defined as four distinct stages: product introduction, growth, maturity, and decline. The amount of time spent in each stage will vary from product to product, and different companies have different strategic approaches to transitioning from one phase to the next.

What Are Product Life Cycle Strategies?

Depending on the stage a product is in, a company may adopt different strategies along the product life cycle. For example, a company is more likely to incur heavy marketing and R&D costs in the introduction stage. As the product becomes more mature, companies may then turn to improving product quality, entering new segments, or increasing distribution channels. Companies also strategically approach divesting from product lines including the sale of divisions or discontinuation of goods.

What Is Product Life Cycle Management?

Product life cycle management is the act of overseeing a product's performance over the course of its life. Throughout the different stages of product life cycle, a company enacts strategies and changes based on how the market is receiving a good.

Why Is Product Life Cycle Important?

Product life cycle is important because it informs management of how its product is performing and what strategic approaches it may take. By being informed of which stage its product(s) are in, a company can change how it spends resources, which products to push, how to allocate staff time, and what innovations they want to research next.

Which Factors Impact a Product's Life Cycle?

Countless factors can affect how a product performs and where it lies within the product life cycle. In general, the product life cycle is heavily impacted by market adoption, ease of competitive entry, rate of industry innovation, and changes to consumer preferences. If it is easier for competitors to enter markets, consumers change their mind frequently about the goods they consume or the market becomes quickly saturated. Then, products are more likely to have shorter lives throughout a product life cycle.

Broadly speaking, almost every product sold undergoes the product life cycle. This cycle of market introduction, growth, maturity, and decline may vary from product to product—or industry to industry. However, this cycle informs a company of how to best utilize its resources, what the future outlook of their product is, and how to strategically plan for bringing new products to market.

Food and Drug Administration. " Frequently Asked Questions on Patents and Exclusivity ."

Microsoft. " Windows 8 and Windows 8.1 End of Support and Office ."

Harvard Business Review. " Exploit the Product Life Cycle ."

Oldsmobile Club of America. " History of Oldsmobile ."

Britannica. " Woolworth Co. "

The Coca-Cola Company. " The Story of One of the Most Memorable Marketing Blunders Ever ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

To read this content please select one of the options below:

Please note you do not have access to teaching notes, the product life cycle revisited: an integrative review and research agenda.

European Journal of Marketing

ISSN : 0309-0566

Article publication date: 7 January 2022

Issue publication date: 2 February 2022

This paper aims to respond to calls in academia for an update of the product lifecycle (PLC). Through a systematic literature review, the authors provide an updated agenda, which aims to advance the PLC concept in research, teaching and practice.

Design/methodology/approach

The authors started by surveying 101 marketing academics globally to ascertain whether a PLC update was viewed necessary and beneficial in the marketing community and thereafter conducted citation analysis of marketing research papers and textbooks to ascertain PLC usage. The subsequent literature review methodology was split into two sections. First, 97 empirical articles were reviewed based on an evaluative framework. Second, research pertaining to the PLC determinants were assessed and discussed.

From the results of this review and primary data from marketing academics, the authors find that the method of predicting the PLC based on past sales has been largely unsuccessful and perceived as somewhat outdated. However, a new stream of PLC literature is emerging, which takes a consumer-centric perspective to the PLC and has seen more success at modeling lifecycles in various industries.

Research limitations/implications

First, the study outlines the most contemporary and successful methodological approaches to modeling the PLC. Namely, the use of artificial intelligence, big data, demand modeling and consumer psychological mechanisms. Second, it provides several future research avenues using modern market trends such as sustainability, globalization, digitization and Covid-19 to push the PLC into the 21st century.

Originality/value

The PLC has shown to be resolutely popular in management application and education. However, without a continued effort in academic PLC research to update the knowledge around the concept, its use as a productive management tool will likely become outdated. This study provides a necessary and comprehensive literature update resulting in actionable future research and teaching agendas intended to advance the PLC concept into the modern market context.

• Product lifecycle
• Research agenda

Iveson, A. , Hultman, M. and Davvetas, V. (2022), "The product life cycle revisited: an integrative review and research agenda", European Journal of Marketing , Vol. 56 No. 2, pp. 467-499. https://doi.org/10.1108/EJM-08-2020-0594

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

Product Lifecycle Phases and Their Importance

The four fundamental stages in a product cycle include introduction, growth, maturity, and decline. All these stages are pertinent to the development of a company. The value of having a product life cycle in an organization is to ensure that the firm understands that its products have a limited lifespan (Saaksvuori 2014). Thus, the company will be forced to invest deeply in new product development for the survival of the business.

The product life cycle is important in ensuring that a firm maintains its competitive edge in the market (Niemann 2009). The product life cycle is also an important principle that manufacturers need to comprehend to make profits and survive in the business. Each stage is strategically important to an organization. The introduction stage deals with the launching of the product. During this time, the size of the market is small. Thus, the firm is not expected to make much revenue. Also, in the introduction phase, firms incur costs in research and development. Other expenses are experienced in product testing and market studies.

This stage is critical to a company as it facilitates investment in the best method to reach the consumers. In the growth stage, business experiences a steady increase in revenues from sales and profits. Additionally, the company enjoys benefits from economies of scale and profit margins. The increase in revenue would be pertinent to the respective business to invest in promotional activities (Wang 2011). The promotional activities are geared towards the maximization of the potential of the particular growth stage. Once a firm majors in a particular promotional medium, it will be able to use it next time it introduces a product in the market.

In the maturity phase, the product becomes established. In this phase, the focus of the business is to retain the market share captured (Stark 2011). In addition, a firm must devise the most appropriate competitive method to prevent the operations of its competitors. Thus, the focus shifts to marketing. The company also engages in product modifications to increase its competitive edge.

The significance of the maturity stage is that a company can determine the marketing strategies that are best to use when a product reaches maturity (Saaksvuori 2014). In the decline stage, the product has reached the final stage. In this phase, the market shrinks slowly. One reason behind the shrinkage is that the market becomes saturated with the product. Besides, clients might be switching to the closest substitutes (Giordano 2012). Not only could the consumers be switching to substitutes, but also the different types of products.

Phases in the Product cycle are evaluated based on the outcome of each phase. The phases are used to indicate the next line of action to take. For instance, the introduction phase gives a clue on how an organization is going to handle the growth phase. In the end, the level of customer satisfaction, the number of customers attracted, and the revenues realized indicate how the stages are important. The most crucial stage is the decline stage.

This stage is inevitable. Most firms counteract the repercussions of this stage by switching to cheaper markets or less-expensive production techniques (Niemann 2009). The importance of this phase is that it enables a firm to be adaptive to negative market shocks such as a decline in sales and a reduction in the number of customers. Focus on innovation makes certain that there is product achievement in the development of the other components. Also, a focused attention design-manufacturing interface is significant for less effective marketing methods.

ADNOC (Abu Dhabi National Oil Company) is a firm in the UAE that has utilized the concept of product life cycle. The firm majors in the marketing and distribution of refined products (Abu Dhabi National Oil Company 2016). The products are meant to satisfy petroleum-product users in the UAE. Once the company realized that the market was saturated with its products, it resulted in modifying them. The firm introduced different packaging of the petroleum products using branded containers (Field 2008). In addition, the company lowered the prices of the products to continue holding the attracted market share by its side.

In conclusion, it can be indicated that the product lifecycle is important to understand the growth of a firm. The cycle enables a firm to change policies and tactics to address the outcome of each stage. If a firm successfully comprehends and address each stage successfully, profits and increased sales will be realized.

Abu Dhabi National Oil Company (ADNOC) 2016. Web.

Field, F 2008, China, India and the United States: competition for energy resources . Abu Dhabi, The Emirates Center for Strategic Studies and Research. Web.

Giordano, M 2012, Product Life-Cycle Management Geometric Variations . London, Wiley. Web.

Niemann, J 2009, Design of Sustainable Product Life Cycles . Berlin, Springer. Web.

Stark, J 2011, Product Lifecycle Management 21st Century Paradigm for Product Realisation . London, Springer. Web.

Saaksvuori, A 2014, Product Lifecycle Management . Berlin, Heidelberg, Springer Berlin Heidelberg. Web.

Wang, H 2011, Green Supply Chain Management: Product Life Cycle Approach . New York, McGraw-Hill. Web.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2023, November 23). Product Lifecycle Phases and Their Importance. https://ivypanda.com/essays/product-lifecycle-phases-and-their-importance/

"Product Lifecycle Phases and Their Importance." IvyPanda , 23 Nov. 2023, ivypanda.com/essays/product-lifecycle-phases-and-their-importance/.

IvyPanda . (2023) 'Product Lifecycle Phases and Their Importance'. 23 November.

IvyPanda . 2023. "Product Lifecycle Phases and Their Importance." November 23, 2023. https://ivypanda.com/essays/product-lifecycle-phases-and-their-importance/.

1. IvyPanda . "Product Lifecycle Phases and Their Importance." November 23, 2023. https://ivypanda.com/essays/product-lifecycle-phases-and-their-importance/.

Bibliography

IvyPanda . "Product Lifecycle Phases and Their Importance." November 23, 2023. https://ivypanda.com/essays/product-lifecycle-phases-and-their-importance/.

• Coca-Cola and Nike: Product Life-Cycle
• Willoy Engineering Ltd.'s Accounting System Lifecycle
• Company Lifecycle in Business
• Dubai Electricity & Water Authority's Asset Lifecycle
• Providing a dynamic eMarketplace key stages lifecycle
• Company Lifecycle and Strategy Implementation
• The Importance of Managing the Project Lifecycle to Achieve Successful Project Outputs
• SAP Company's Lifecycle and Business Practices
• Saint Vincent Hospital's Product Lifecycle Management
• Information Lifecycle Management Definition
• We Make Widgets Inc.'s Leadership Consultancy
• Lean Thinking in Supplier Optimisation
• Big Data and Corporate Social Responsibility
• Performance Index and Quality Management Innovation
• Implementing Alternative Management Solutions

• Undergraduate
• High School
• Architecture
• American History
• Asian History
• Antique Literature
• American Literature
• Asian Literature
• Classic English Literature
• World Literature
• Creative Writing
• Linguistics
• Criminal Justice
• Legal Issues
• Anthropology
• Archaeology
• Political Science
• World Affairs
• African-American Studies
• East European Studies
• Latin-American Studies
• Native-American Studies
• West European Studies
• Family and Consumer Science
• Social Issues
• Women and Gender Studies
• Social Work
• Natural Sciences
• Pharmacology
• Earth science
• Agriculture
• Agricultural Studies
• Computer Science
• IT Management
• Mathematics
• Investments
• Engineering and Technology
• Engineering
• Aeronautics
• Medicine and Health
• Alternative Medicine
• Communications and Media
• Advertising
• Communication Strategies
• Public Relations
• Educational Theories
• Teacher's Career
• Chicago/Turabian
• Company Analysis
• Education Theories
• Shakespeare
• Canadian Studies
• Food Safety
• Relation of Global Warming and Extreme Weather Condition
• Movie Review
• Admission Essay
• Annotated Bibliography
• Application Essay
• Article Critique
• Article Review
• Article Writing
• Book Review
• Business Plan
• Business Proposal
• Capstone Project
• Cover Letter
• Creative Essay
• Dissertation
• Dissertation - Abstract
• Dissertation - Conclusion
• Dissertation - Discussion
• Dissertation - Hypothesis
• Dissertation - Introduction
• Dissertation - Literature
• Dissertation - Methodology
• Dissertation - Results
• GCSE Coursework
• Grant Proposal
• Marketing Plan
• Multiple Choice Quiz
• Personal Statement
• Power Point Presentation
• Power Point Presentation With Speaker Notes
• Questionnaire
• Reaction Paper

Research Paper

• Research Proposal
• SWOT analysis
• Thesis Paper
• Online Quiz
• Literature Review
• Movie Analysis
• Statistics problem
• Math Problem
• All papers examples
• How It Works
• Money Back Policy
• Terms of Use
• Privacy Policy
• We Are Hiring

Understanding Product Life Cycle, Essay Example

Pages: 1

Words: 378

Hire a Writer for Custom Essay

Use 10% Off Discount: "custom10" in 1 Click 👇

You are free to use it as an inspiration or a source for your own work.

Products and go through different stages, and these stages (their order and length) have an impact on strategic alternative selection. The product life cycle can be analyzed based on the market conditions (sales and profits), throughout the time when the product or service is available for customers. The benefit of using product life cycle assessment is improving the organization’s knowledge about the market conditions. However, the disadvantage is that the assessment is based on individual judgements and predictions of the future. There are many unexpected market trends that can affect the life cycle of the service.   The four stages of product life cycle are: introductory, growth, maturity, and decline. Profitability, external conditions, and demand are different during each stage of the life cycle. In the introduction stage, sales are low, and profits are negative. There are only a few competitors, and the cost to customers is high. In the growth stage, revenue grow rapidly, profits peak, and the number of competitors grows, which makes the organization reduce its prices. In the maturity stage, growth of revenues is low, cost to customers is reduced, and competition is increased, while profits remain high. In the decline stage of the product life cycle, sales start to decline, profits are low, and prices are low. The number of competitors is declining.

It is important for a health care organization to complete a product life cycle analysis in order to select the right market entry strategy. No matter which market entry strategy the organization chooses, it needs to know the product life cycle associated with the strategy.  A product life cycle analysis answers the questions managers might have related to the market entry strategy, such as:

• Which stage of the cycle the organization’s products or services are
• How long is the current stage (and the entire cycle) likely to last

The results of the external analysis and environmental analysis can help judge the likely scenario related to the life cycle of the product or service. As an example, if the product or service is in the maturity stage, some of the strategy choices most suitable are market development or product development, while related diversification is not recommended.

Works Cited

Swayne, Linda E., W. Jack Duncan, and Peter M. Ginter.  Strategic management of health care organizations . John Wiley & Sons, 2012.

Stuck with your Essay?

Get in touch with one of our experts for instant help!

Emotional Dynamics in Fieldwork With Racist Activists, Research Paper Example

Understanding the Organization’s Culture, Essay Example

Time is precious

don’t waste it!

Plagiarism-free guarantee

Privacy guarantee

Secure checkout

Money back guarantee

Related Essay Samples & Examples

Voting as a civic responsibility, essay example.

Words: 287

Utilitarianism and Its Applications, Essay Example

Words: 356

The Age-Related Changes of the Older Person, Essay Example

Pages: 2

Words: 448

The Problems ESOL Teachers Face, Essay Example

Pages: 8

Words: 2293

Should English Be the Primary Language? Essay Example

Pages: 4

Words: 999

The Term “Social Construction of Reality”, Essay Example

Words: 371

We use cookies to enhance our website for you. Proceed if you agree to this policy or learn more about it.

• Essay Database >
• Essay Examples >
• Essays Topics >
• Essay on Sales

Product Life Cycle Essay

Type of paper: Essay

Topic: Sales , Marketing , Company , Market , Apple , Steve Jobs , Business , Products

Words: 1700

Published: 02/03/2020

ORDER PAPER LIKE THIS

The Product Life Cycle

The life cycle of a product is divided into four stage based on the revenue generated by the product or service. The life cycle concept may apply to a category of product or brand with varying duration for different products or brand. The stages that a product goes during the product life cycle include introduction stage, growth stage, maturity stage, and decline stage. During the introduction stage, most companies concentrate their efforts in advertising and promotion to make consumers aware of their product. Because of low sales and high cost, most companies tend to lose money during this stage. During growth stage, firms focus their strategy in increasing sales, which requires increasing advertising cost. A company may decide to lower prices in order to remain competitive. If a product survives the growth stage, it reaches the maturity stage where it stays for a relatively linger time. During this stage, sales continue to grow, though at a slower pace, before stabilizing. Despite presence of price wars, companies reap high profits because of high sales volume. A company may make modifications to the products to meet consumers’ changing preferences when they become outdated. The last stage is the decline stage where company experiences declines in demand for its products as more innovative products absorb the attention of consumers.

Industry Selection

The industry that I selected for this analysis if consumer electronics industry. The example of product in introduction is Samsung S4, released in 2013. An example of product in growth stage of the product life cycle is the Panasonic 3D TV because it was introduced less than three years ago. An example of product in growth stage of the product life cycle is iPhone. An example of product in decline stage of the product life cycle is the videocassette recorder.

Products and product life cycle stage

The introduction stage is when the public first hears about or sees a product. The product finds its way into the stores for the first time and TV advertisements and print media appear for the first time. Samsung S4 is at this stage of the product life cycle. The product went public for the first time in March 2012 during a major product launch event in New York. This was followed by introduction of the smartphone to the UK market on April 27, 2013. Many known and popular products, such as iPad is in the growth stage of the product life cycle. Apple introduced iPod, with the first version gaining market entry in 2001. The company managed to extend the maturity phase of the iPod by introducing the iPod touch, which came with a touch screen and advanced features. It also came with new functionalities such as apps, which makes it more useful and versatile than older iPods. The major concern of Apple is to maintain market share while maintaining revenues. The competition from other competitors has pushed iPod into growth stage. An example of product in the maturity stage of the product life cycle is Nintendo Wii. Even though the sales for the product are declining, profits are still positive. The company has announced its plans to introduce a new console into the market in order to extend the maturity phase. Example of a product in decline stage is VCR. VCR is experiencing decline in capacity utilization due to the market shift to alternative products. VHS was introduced in 1976, and by 1984, Toshiba had introduced plans for Digital Versatile Disc (DVD). By 1996, the film industry had started using DVDs (). The demand for DVD surpassed that of VHS by 2003 and by 2004, Hollywood studies stopped using VCR by 2004.

Reason for choosing consumer electronic industry

I chose the consumer electronic industry because the major force driving the industry is innovation and technology.

Marketing strategy for Samsung S4

Launching a new product is probably the most daunting task for product manager of consumer electronics because of the frequency by which it happens compared to traditional industries where a single product can stay in the market for many years. Normally, consumer electronics exist long before they are introduced into the marketplace. The low number of sales of consumer electronics is not usually due to logistics problems. The low sales result from two factors: the low number of buyers ready to embrace innovation and the initial high cost of products due to the need to break even with the cost of research and development. The recommended marketing strategies for Samsung are detailed below. The company uses demographic segmentation to study potential customers. It is evident that Samsung is targeting the U.S. market following the decision by the South Korean giant to chose the U.S. as the venue to launch its latest smartphone, the Galaxy S4. When a new product is introduced into the market, sales volumes are usually very low. As such, Samsung must look for strategic goal of acquiring a strong market position. The product targets the high-end market, educated people, affluent as well as early adopters of technology. Samsung should improve the product features such as software and size in order to differentiate it from Apple as well as other devices using Android. The new smartphone comes with a variety of new features, but the company should avoid overwhelming users with large number of features, not all of which may prove useful. As such, Samsung should consider removing some of the features and reduce the price slightly. Samsung should leverage its superiority its wide following in the low-end smartphone market to start challenging Apple in the high-end smartphone market. The company has the potential to position itself in the high-end market as evidenced by sales data following the introduction of high-end Galaxy.

Marketing strategy for iPad

In the growth stage of the product life cycle, sales, revenues, and profits begin to grow as the product gains popularity and market acceptance. Concerning market segment, Apple requires more than the early adopters to increase the total market size. This involves targeting data producers, data users, technology pragmatist, as well as technology enthusiast. Apple has traditionally segmented its products vertically, with each product having a particular use. The market segment for Apple’s iPad is readers, but it can also segment the market to include people who want to access data in places without access such as in the kitchen and outdoors. Apple should consider targeting older people who rarely use computers. Another target market would include iPod and iPhone users who are comfortable with a touch screen but need something bigger. Another target market to consider are students who are tired of carrying heavy textbooks and want to download their e-book anywhere and anytime they need. Apple can position iPad to students as e-textbook with good price and convenience, as well as an easy to carry, movie, game, music, and internet surfer device. Apple would position the product to Kindle lovers and book lovers as an easy to and a device that is more than a book, with a wide selection of e-books and more than140, 000 applications. In order to remain competitive, Apple should consider selling mainly to major content consumers because this will drive the likelihood of them consuming other Apple content. Additionally, Apple should not compete based on price regardless of what competitors offer. Apple should maintain the iPad as a premium brand.

Marketing Mix

Apple changed its pricing strategy when it launched iPad, with prices lower that that anticipated by the market. Apple should not consider reducing the prices further in an attempt to increase their customer base. The company should however form a larger distribution network to keep up with the pace of demand.

Marketing strategy for Wii

Nintendo Wii is currently in the maturity stage. The company segments its markets geographically and mainly target developed countries and affluent market segments. Due declining sales, the firm should consider expanding its market to developing countries because they have the potential for market growth. Nintendo Wii uses differentiation approach in market targeting. The main target markets include the upper middle class families, older people, soccer moms, and generation Y and childless couples. The company should also target the high-end market by innovating new products. Nintendo should position Wii as a family product that is not expensive, that has more family oriented games and easy to use. Wii should also add social attributes to its key competitive advantages.

Product strategy

Adding more apps to the Wii, building a co-branding relationship with social sites, and using social media capabilities to market are some of the recommended product strategies. Nintendo can also up-date product design and include stickers of app logos.

Marketing mix

Nintendo should adopt competitive-based pricing by keeping prices lower than that of PS3 and Xbox. They should also keep the prices affordable for families because their preferences will encourage them to many accessories offered by Wii. The company can also introduce bundle pricing to increase sales revenue. The company can employ both push and pull strategies in promotion. They can have displays in prominent stores as well as demo kiosks. They also need to conduct massive sales promotion and advertising campaign to extend product stay in the market. The marketing objectives should be to inform, persuade, and remind. The company should also try personal selling to reach more customers.

Marketing strategy for VCR

VCR is currently in the decline stage and there are possibilities for the product to face extinction. The company should segment it markets based on demographics with older people constituting the main target market. Older people still prefer using VCR and VHS as a way of visiting the past. The company can also target enthusiasts who believe that the old videotape format creates better sound and picture compared to digital media.

Cite this page

Share with friends using:

Removal Request

Finished papers: 2236

This paper is created by writer with

ID 287683127

If you want your paper to be:

Well-researched, fact-checked, and accurate

Original, fresh, based on current data

Eloquently written and immaculately formatted

275 words = 1 page double-spaced

Get your papers done by pros!

Other Pages

Ice literature reviews, trend analysis reports, halogen reports, orthopedics reports, independent movie reviews, income movie reviews, oppression movie reviews, incorporation research proposals, history essay examples, the healthcare debate essay sample, example of definition of the topic earthquake it is a sudden shaking of the earth which occurs essay, investment in south africa essay example, slave populations and distribution in the united states course work examples, understanding ozymandias essay, essay on difference, example of the spirit of irish freedom research paper, essay on strategies for the expansion of subway in chinese market, epidemiology case study examples, trying to find chinatown by hwang essay, ima statement of ethical professional practice essay examples, labor from wwi to 1980 from seeming security to apparent doom essay example, nationalism by leon p baradat critical thinking sample, example of essay on the swings of the pendulum conservatism and liberalism, recommendations essay examples, health care delivery course work sample, gaffe essays, toothbrush essays, snowboarding essays, yacht essays, skyline essays, grenade essays, stripe essays, handgun essays, masonry essays, locust essays, quail essays, baritone essays, salafism essays, wahhabism essays, mazda essays, mendoza essays, stiles essays, roberson essays.

Password recovery email has been sent to [email protected]

Use your new password to log in

You are not register!

By clicking Register, you agree to our Terms of Service and that you have read our Privacy Policy .

Now you can download documents directly to your device!

Check your email! An email with your password has already been sent to you! Now you can download documents directly to your device.

or Use the QR code to Save this Paper to Your Phone

The sample is NOT original!

Short on a deadline?

Don't waste time. Get help with 11% off using code - GETWOWED

No, thanks! I'm fine with missing my deadline

Coca-Cola Company: Product Life Cycle

Introduction, background to the study.

The US beverages industry has witnessed rampant growth over the past decades (Spelman Research, 2003, p. 2). This is evident in the large number of domestic and foreign investors who have ventured into the industry. The core operations of the industry entail the production and marketing of diverse non-alcoholic beverages, mineral water, and carbonated beverages. Due to the industry’s profitability potential, the degree of rivalry amongst competing firms has increased.

According to Adam & Armstrong (2005, p. 60), increment in competition amongst rival firms tends to reduce the industry’s level of profitability. This arises from the fact that firms compete to attain significant market share compared to their competitors.

One of the firms operating in this industry is Coca Cola Company. Over the years, the firm has managed to develop a relatively high competitive advantage compared to its competitors. The firm’s management team has appreciated the importance of conducting market trend analysis. This enables the firm to develop effective operational strategies. Through consumer market research, the firm has appreciated the need to meet customers’ needs satisfactorily.

This results from the realization of the fact that consumers change their consumption behavior over time. According to PRLog (2008, para. 1), consumers have become health conscious in their consumption patterns. The report asserts that increment in consumer health awareness has culminated from information explosion regarding beverages and soft drinks. This has been translated into an increment in demand for a soft drink amongst the consumers. In addition, changes within the competitive environment have played a significant role in the operation of the firm. Some of Coca-Cola’s key competitors include PepsiCo and Cadbury Schweppes (Spelman Research, 2003, p. 4).

According to Spelman Research (2003, p. 6), Coca-Cola Company managed to attain a significant market share of 30% in the US industry compared to that of PepsiCo and Cadbury Schweppes which were 27% and 11% respectively. Nestlé’s market share was 3% while other small firms’ market share was 29%. Considering the changes within the external environment, firms need to incorporate effective operational strategies. To attain this, the firm has integrated the concept of product diversity. The firm has been attaining this through continuous product development. This contributes towards the firm meeting consumers’ demands.

This report is aimed at analyzing the product life cycle with specific reference to Coca-Cola Company.

Definition of the product life cycle is given and the four stages of the product life cycle are identified and analyzed. These include introduction, growth, maturity, and decline. In addition, the report gives an analysis of the impact of these stages on the firms marketing strategies. These relate to the product, promotion, pricing, and distribution. Finally, a conclusion and recommendations are given.

Product Life Cycle

According to 12 Manage (2010, para. 7), the Product Life Cycle (PLC) is defined as the stages that a given product undergoes in its development. For a firm to succeed in an environment characterized by intense competition, it is paramount for the firm to incorporate effective entrepreneurial strategies. One of the key strategies that a firm’s management team can integrate relate to invention and innovation.

The resultant effect is that the firm can attain a high competitive strategy relative to its competitors. In its operation, Coca-Cola Company has effectively incorporated the concept of product innovation. As a result, the firm has introduced several segments. These include carbonates, fruit juices, bottled water, functional drinks, and Ready-To-Drink (RTD) tea and coffee. These products are traded under different brand names (Spelman Research, 2003, p.7). For these products to succeed in the market, it is paramount for the firm’s management team to consider the concept of PLC.PLC has 4 stages which include;

Introduction stage

Growth stage, maturity stage, decline stage.

The concept of PLC is based on the same concept of the biological life cycle. Over the years, PLC has become very important in the operation of firms. This is because firms are increasingly incorporating product development to attain their profit maximization objective. As result, the firm’s management teams are being committed to ensuring that this objective is attained within the PLC. This makes it clear that the firm’s management teams must incorporate the concept of PLC in the process of formulating and implementing diverse marketing strategies.

Upon successful development of a product, the product has to be introduced in its specific target market. This contributes towards the target customers accessing the product. This is the firm’s first step towards ensuring that there is sufficient market awareness regarding the product. Significant cost is incurred at the introduction phase. For instance, the successful introduction of a product in the market is determined by the effectiveness with which the firm has tested the market.

In addition, the cost of introducing the product into the market will also be increased by the need to create market awareness through promotion. At this stage, the firm’s ratio of promotion expenditure to sales is very high. The cost involved at this stage is also increased by the need to secure an effective distribution channel (Free presentation slides, 2008, para. 7).

To compete with firms producing a variety of functional products, Coca Cola Company introduced Bubble Buzz which is a tea product. The need to develop the new product was instigated by a change in consumer demands for the soft drink. According to Afsha, Chin-Yun, Audrey, and Nicolas (2006, p. 6), there is a shift in consumer consumption patterns. Currently, consumers do not prefer carbonated drinks. The product was specifically designed to meet the physiological, nutritional, and hydrating demands of the customers. According to Marketing Teacher (2010, para. 5), the need for the firm to attain instant profit is not a key consideration in this phase. As a result, the introduction stage is characterized by relatively low market size and slight growth.

At this stage, the product has already penetrated the market. As a result, the firm’s level of profit is increased due to a high rate of sales growth. In addition, firms attain economies of scale at this phase enabling them to develop their competitive advantage about pricing. The intensity of competition also increases at this stage. This arises from the fact that a large number of potential investors are attracted to venture into the industry. As a result, it becomes vital for firms to incorporate strategies aimed at building the brand. One of the strategies relates to market communication strategies.

This is attained through an increment in the firm’s commitment to its promotion campaign enabling the product to survive in the market. In addition, the firm’s market share at this stage starts to stabilize. In marketing its Bubble Buzz product within the RTD tea segment, the Coca-Cola Company has witnessed a relatively high level of market share. By 2003, the segment was the fastest growing. According to Spelman Research (2003, p. 3), the market for RTD tea has witnessed an annual growth of 6%. This growth has been sustained for the last 5 years.

The maturity stage is universal in all the products. At this stage, the degree of rivalry amongst competing firms is very high. This results from the fact that all firms are fighting to retain their market share. In addition, firms receive the highest level of profits at this stage. However, growth in sales is at a low rate until they stabilize.

At this stage, the market for the product shrinks leading to a reduction in the level of profit within the industry. The shrink may result from a shift in consumer tastes and preferences or the introduction of other products which are more innovative.

Impact of PLC on marketing strategies

Promotion strategy.

At this phase, product awareness is vital. Thus, the company must strategize on how to market its product/service. This can only be attained through the incorporation of a promotion strategy. Depending on the target market, the firm has to determine the best promotion method at the introduction phase. However, a firm needs to consider Integrated Marketing Communication (IMC) at this phase.

According to Adam& Armstrong (2005, p. 65), IMC entails diverse methods of creating market awareness. This will ensure that information awareness is effectively created within the target market. In introducing Bubble Buzz in the market, the Coca-Cola Company utilized diverse promotion methods. These included advertising, public relation, sales promotion, and incorporation of emerging information communication technologies. This enabled the product to be widely recognized in the domestic and international markets.

According to Marketing Teacher ( 2010, para. 4), there is a low probability of a firm making a profit about new products being introduced in the market during their introduction stage. At this stage, the firm’s management team should formulate effective monitoring strategies. These strategies should be aimed at ensuring that the product penetrates the market and start to grow. In addition, monitoring the products at this phase will safeguard against the products from being withdrawn.

Pricing strategy

Because consumers are price-sensitive, it is paramount that the management teams formulate an effective pricing strategy. In their purchasing patterns, price is one of the variables that consumers consider. This makes it important for firms to decide on the best pricing strategy to utilize in this stage. Because the product is new to the market at this phase, a penetration pricing strategy should be incorporated.

The strategy entails setting the price of the product at a relatively low price compared to its competitors. As a result, the price set will appeal to the consumers making them consider purchasing the product. The ultimate result is that a firm can penetrate the market and attain a large market share. However, a penetration pricing strategy should be used when the market size of the product is large and the intensity of competition is high (Free presentation slides, 2008, para. 9). For Coca-Cola Company to effectively penetrate its target market for Bubble Buzz, penetration pricing was used.

Considering the intensity of competition at the growth stage, it is paramount for firms to consider attaining price competitiveness. At this stage, the firm has already attained economies of scale. This will make it possible for the firm to set the price of its products at a low point.

The maturity stage has an impact on the firm’s pricing strategy. This arises from the intensity of competition characterizing this stage. This makes the maturity stage to be characterized by a price war.

At the decline stage, most of the firms cut the price of their products to attract and retain customers. However, consumers are attracted to more innovative products. In extreme situations, the product may be withdrawn.

Product and Expansion strategy

For a firm to be competitive, continuous product innovation should be undertaken (Adam & Armstrong, 2005, p. 66). At this juncture, the market is by now saturated. This is because a large number of similar products are introduced in the market by competing firms. At this stage, the firm needs to integrate product differentiation. This will enable the firm’s products to be unique.

The maturity stage has an impact on the firms financing and marketing activities. Due to the intensity of competition, the firm has to be keen on the marketing strategy adopted. This is because there is a high probability of the competitor adopting the same strategy. The effect is that the strategy will not be effective. To attain a competitive edge during the growth phase; firms have to consider strategies aimed at attaining a high market share through expansion.

Some of the strategies that firms consider integrating relate to the formation of joint ventures, takeovers, and formation of alliances (Marketing Teacher, 2010, para. 8). This enables firms to enable the firm to position themselves in the market. The above expansion strategy culminates in an improvement in the firm’s production efficiency. To implement these strategies, a significant amount of finance is required. This makes it vital for the firm to make an optimal financing decision. In addition, finances are paramount at this stage since it enables the firm to conduct product development more effectively. This can be achieved through the incorporation of product innovation leading to an improvement in the quality of products.

In the decline juncture, the organization must look for alternative markets for its products where they can offer them at a lower price. In addition, the firm should reduce the amount incurred in its production cost.

For a firm to be successful in the long term, it should consider developing effective operational strategies. One of the strategies that should be incorporated relates to product innovation. Upon introducing the product in the market, the firms’ management team needs to consider its life cycle. Most products have 4 stages. Each stage has different characteristics about the market. By considering these stages, a firm can able to formulate and implement effective marketing strategies.

This is because these stages have an impact on the strategies relating to the product, price, promotion, and distribution. According to the stage of the product, a firm can be able to adjust its marketing strategies. The ultimate effect is that the firm can develop a high competitive advantage.

Recommendations

Coca-Cola Company should consider the following in marketing its products.

• Conduct continuous evaluation of the products PLC.
• Adjust its marketing strategies according to the various stages of its products.

Reference List

Adam, K. & Armstrong, D., 2005, Principles of marketing. Australia: Pearson Education.

Afsha, B., Chin-Yun, C., Audrey,L. & Nicolas, R. 2006. Example of a marketing plan: bubble buzz. New York: University of New York. Web.

Free Presentation Slides. 2008. Introduction phase of product life cycle concept. New York: Amazon Kindle Review. Web.

Marketing Teacher. 2010. The product life cycle. New York: Marketing Teacher Limited. Web.

PRLog. 2008. Soft drink production in the US . Washington: Bharatbook. Web.

Spelman Research. 2003. US soft drink market. New York: Independent Investment Research. Web.

12 Manage. 2010. Analyzing industry maturity stages: explanation of product life cycle of Levitt. London; The Executive Fast Track. Web.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2021, December 11). Coca-Cola Company: Product Life Cycle. https://studycorgi.com/coca-cola-company-product-life-cycle/

"Coca-Cola Company: Product Life Cycle." StudyCorgi , 11 Dec. 2021, studycorgi.com/coca-cola-company-product-life-cycle/.

StudyCorgi . (2021) 'Coca-Cola Company: Product Life Cycle'. 11 December.

1. StudyCorgi . "Coca-Cola Company: Product Life Cycle." December 11, 2021. https://studycorgi.com/coca-cola-company-product-life-cycle/.

Bibliography

StudyCorgi . "Coca-Cola Company: Product Life Cycle." December 11, 2021. https://studycorgi.com/coca-cola-company-product-life-cycle/.

StudyCorgi . 2021. "Coca-Cola Company: Product Life Cycle." December 11, 2021. https://studycorgi.com/coca-cola-company-product-life-cycle/.

This paper, “Coca-Cola Company: Product Life Cycle”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: September 28, 2023 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

Home — Essay Samples — Business — Starbucks — Analysis Of Starbucks’ Product Life Cycle

Analysis of Starbucks’ Product Life Cycle

• Categories: Company Starbucks

About this sample

Words: 874 |

Published: Jun 17, 2020

Words: 874 | Pages: 2 | 5 min read

Table of contents

Introduction.

Cite this Essay

Let us write you an essay from scratch

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Get high-quality help

Dr. Karlyna PhD

Verified writer

• Expert in: Business

+ 120 experts online

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

Related Essays

4 pages / 1656 words

2 pages / 701 words

2 pages / 1003 words

3 pages / 1402 words

Remember! This is just a sample.

You can get your custom paper by one of our expert writers.

121 writers online

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

Related Essays on Starbucks

In today's competitive business landscape, employee recognition has become a crucial aspect of fostering a positive work environment and driving organizational success. Starbucks, a global leader in the coffee industry, has long [...]

Starbucks, the multinational coffeehouse chain, is a ubiquitous presence in cities and towns around the world. With its distinctive green and white logo and its reputation for quality coffee and cozy ambiance, Starbucks has [...]

The current restructuring of the world-economy under global capitalism has further integrated international trade and production (Gereffi et el 1994:159). Globalization has broken down geographical boundaries and with [...]

Starbucks, the global coffee giant, is renowned for its high-quality coffee, inviting ambiance, and exceptional customer service. Behind the success of Starbucks lies a dedicated team of employees who work together seamlessly to [...]

With its iconic green logo and the enticing aroma of freshly brewed coffee, Starbucks has become a global phenomenon, attracting millions of customers each day. In this essay, we will explore Starbucks' target market, delving [...]

Starbucks is a giant coffee chain, which targets customers who are willing to spend extra in search for high quality service and product. The company has been developed on a significant understanding on the different levels of [...]

Related Topics

By clicking “Send”, you agree to our Terms of service and Privacy statement . We will occasionally send you account related emails.

Where do you want us to send this sample?

By clicking “Continue”, you agree to our terms of service and privacy policy.

Be careful. This essay is not unique

This essay was donated by a student and is likely to have been used and submitted before

Download this Sample

Free samples may contain mistakes and not unique parts

Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

Please check your inbox.

We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

Get Your Personalized Essay in 3 Hours or Less!

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free