„In short, we were impressed by the modularity and scalability with which you can work in the system. "
Siegfried SchneiderCMO, Red Dot Design
product data
15 min
The product life cycle is a key concept in product management that describes the progression of a product from its launch to its withdrawal. It is crucial for companies to understand the different phases of this cycle in order to apply the right strategies at the right time and maximize the success of their products.In this article, you will learn what the Product Life Cycle is, what phases it comprises and how retailers and webshops can use these insights to strengthen their market position and extend the life of their products.
Every product goes through a life cycle that takes place in different phases – from market launch to final decline. Companies need to be aware of these phases in order to manage their products optimally and apply the right strategies at the right time.The product life cycle is a model from business administration that helps companies to understand the duration of the individual phases and to make strategic decisions based on the life cycle of a product.In this article, you will learn everything you need to know about the product life cycle, the phases at a glance, the role of the Boston Consulting Group (BCG) and how you can extend the life of your products.
The product life cycle describes the various phases that a product goes through from its market launch to its withdrawal. It is a product life cycle model that is used in business administration to analyze the development of a product’s sales and turnover over time.Companies use this model to determine the right time for marketing measures, pricing strategies and product innovations. The life cycle of a product generally comprises four to seven phases, each of which presents different challenges and opportunities.
Understanding the product life cycle is crucial for strategic decisions, as it shows how long a product will remain profitable and when it is time to invest in new products. The life cycle of a product depends on various factors, such as market trends, competitive pressure and technological developments.
The product life cycle can be divided into several phases, each of which requires different strategies and measures. The four main phases are:
Let’s look at each of these phases in detail.
The market launch phase begins as soon as a new product is introduced to the market. This phase is crucial as it lays the foundation for the future success of the product. In this phase, sales are often still low as the product is not yet known and potential customers first need to be convinced.
Marketing and sales play a central role in the market launch. During this phase, companies must invest considerable resources in advertising and promotion in order to increase awareness of the product, optimize their product information and attract initial buyers. New target groups must be addressed and convinced of the added value of the product.
A good example of this is the launch of a new smartphone. In the first few weeks after the market launch, a lot of advertising is placed to arouse consumer interest. The challenge in this phase is to convince the market of the merits of a completely new product and to assert it against established competitors.
As soon as the market launch has been successful and the product has gained recognition, the growth phase begins. In this phase, sales and turnover rise sharply as the product is established on the market and has gained a broad customer base. The beginning of the growth phase is often characterized by a rapid increase in market share.
Growth in this phase depends on various factors, such as market demand, the competitiveness of the product and the effectiveness of the marketing strategy. Companies use this phase to strengthen their market position, increase their relative market share and tap into new target groups.
In this phase, it is important to optimize production and expand distribution channels to meet the growing demand. A good example of this is a successful technical device that quickly gains popularity after its launch and whose sales figures increase rapidly.
The maturity phase is reached when the product has reached its peak in terms of sales and turnover. In this phase, the product has an established market share and competes in a saturated market. The market is now saturated, which means that there are hardly any growth opportunities left and competition becomes more intense.
In the maturity phase, it is crucial to maintain market share and develop strategies to extend the life of the product. Companies must introduce innovations to keep the product attractive and ensure its relevance on the market. This can be achieved through product improvements, new features or special promotions.
An example of this is the introduction of new models or variants of a product that have been specially developed to maintain customer interest. At this stage at the latest, companies need to get creative in order to maintain their position, as competition is fierce and the product is at risk of being displaced by newer, more innovative alternatives.
The saturation phase occurs when the product has reached its maximum market share and there is no more growth. Sales stagnate and turnover slowly begins to fall as the market is saturated. In this phase, companies focus on extending the life of the product for as long as possible, for example by adjusting pricing strategies or expanding into niche markets.
The decline of the product begins when sales fall sharply and the product gradually loses relevance. This can be caused by new, more competitive products or by changes in consumer preferences. Companies must make strategic decisions at this stage as to whether to continue offering the product or withdraw it from the market.
A good example of this is a technological device that is replaced by newer versions and whose sales and turnover fall rapidly. Companies that react in time can redirect their resources to the development of new products and thus initiate the transition to a new growth phase.
The product life cycle is influenced by various factors that determine how long a product remains on the market and how successful it is. These factors can be both internal and external and include:
These factors not only influence the success of a product, but also the duration of the individual phases of the product life cycle. Companies must be flexible and adaptable in order to react to these influences and keep their products successful on the market.
In the context of the product life cycle, PIM (Product Information Management) software plays a crucial role, especially in the management and optimization of product data in the various phases. With PIM software, companies can efficiently manage and update central product information and keep it consistent across all sales channels.This is particularly important during the market launch to ensure that all relevant data is correct and available in a timely manner. Even in the growth and maturity phase, PIM software helps to optimize product data and support targeted marketing strategies, which can ultimately extend the life and success of a product in the market.
The product life cycle model is an important tool in business administration that helps companies to understand the progression of a product from launch to decline and to make strategic decisions. One of the best-known models closely associated with the product life cycle is the BCG matrix from the Boston Consulting Group.
Die BCG-Matrix teilt Produkte in vier Quadranten ein: Question Marks, Stars, Cash Cows und Dogs. Diese Klassifizierung basiert auf dem relativen Marktanteil und dem Marktwachstum eines Produkts.
The product life cycle model and the BCG matrix are valuable tools for analyzing the success of products and making strategic decisions. They help companies to optimize their product portfolios and secure their market position in the long term.
The different phases of the product life cycle offer different opportunities and challenges that companies must take advantage of in order to strengthen their market position and maximize the success of their products. Specific strategies can be derived from each phase that are tailored to the respective market conditions.
By deriving strategies from the product life cycle, companies can ensure that they make the right decisions at the right time and secure their market position in the long term.
The product life cycle provides companies with valuable guidance on how to maximize the success of their products and react to changes in the market in good time. By understanding the life cycle of your products and deriving the appropriate strategies, you can ensure that your company remains competitive in a dynamic market environment.
It is important to regularly review your product portfolio and keep an eye on the phases of the product life cycle in order to be successful in the long term. The product life cycle is considered one of the most fundamental methods for evaluating the profitability and future viability of products and making strategic decisions accordingly.
The product life cycle describes the various phases that a product goes through from market launch to decline. It is a model that helps companies to analyze the life of a product and make strategic decisions.
The product life cycle generally consists of four main phases: Market launch, growth phase, maturity phase and saturation phase/decline. In some models, the cycle is divided into up to seven phases.
The product life cycle is influenced by various factors, including market trends, competition, technological developments, economic conditions and legal regulations.
Companies can extend the life cycle of a product by introducing innovations, opening up new markets, intensifying marketing or offering product improvements.
The product life cycle model is a business management concept that describes the progression of a product’s sales and turnover over time. It helps companies to make strategic decisions and optimize their market position.
The relative market share is an important indicator of a product’s success. A high market share in a growing market signals potential for further investment, while a low market share in a declining market indicates that the product should be withdrawn from the market.