Having a basic understanding of the product lifecycle is important to grow a successful business. A product lifecycle is the cycle of activities that a product goes through from its inception to its final disposal.
It contains several distinct stages, each with its own set of activities, but sometimes overlapping, with one stage still ongoing while the next has already begun.
In this guide, we’ll dive deep into what the product lifecycle is, its stages, and the responsibilities of the product manager at each stage.
What is a product lifecycle?
The product lifecycle is a concept that describes the stages of a product’s development over its lifetime. It is a fundamental concept that explains how products are designed, developed, and launched.
Understanding the lifecycle of a product is crucial to understanding how to market and handle that product. In general, it is divided into six distinct stages of product existence, each with its own characteristics and needs.
What is product lifecycle management?
Product Lifecycle Management (PLM) process is used to manage the entire lifecycle of a product, from initial conceptualization to final production and distribution.
PLM solutions help companies plan, manage, and accelerate the creation of new products. It also facilitates collaboration between internal stakeholders to achieve optimal results from every phase of a product’s lifecycle, from concept through launch.
Benefits of Product life cycle
There are several benefits to having a product life cycle.
- It can help companies better predict and plan for future demand.
- It can provide information on how to improve and optimize product design and production.
- It can help companies assess the financial performance of their product over its lifespan.
- It helps to understand the stages of the product life cycle.
- It helps to identify the various marketing approaches that can be used in various stages of the product life cycle.
How the Product life cycle Works
The product life cycle is a model for understanding the stages of products throughout their life cycle. It begins with an idea, presented either as a product or a process. This idea could either be a unique new concept or an improvement to an existing technology.
After the idea is developed into a product and tested, it is put into production and marketed to the public. The product is then used and influenced by a large number of people.
At this stage, sales become stagnant, followed by increased competition and innovation, until the product reaches maturity and begins to decline again. Let’s dive deep into each of the stages.
Product life cycle Stages
The product life cycle has six phases: development, introduction, growth, maturity, saturation, and decline. These phases are defined by the characteristics of a product or service, its market, and its competitors.
Development Stage
The development stage is the first stage in product development, where you build your product. This is where all the hard work happens: you’re researching, designing, building, and testing your product.
This stage begins with a need to solve a problem and translates into the development of a new product to satisfy this need.
At this point, you’re focused on creating a minimum viable product (MVP), which does not have to be perfect or complete. Rather, it should be a representation of your idea that can be used for testing and feedback purposes.
The most important thing to keep in mind during this stage is that it takes time. Don’t expect to build something amazing overnight, instead, focus on building a product that solves the customer’s problem.
Responsibilities of the PM in development stage
During the development stage, a product manager is responsible for making sure that the product meets the needs of customers and that it will be profitable. In the development stage, this includes:
- Research: This is where PMs identify market needs, uncover customer pain points, find out about competitors and develop a product that meets those needs. It’s the PMs job to carry out surveys and collect feedback from people who fit your target audience.
- User research: One of the responsibilities of the PM is to define the target you will be selling to. This includes creating a user persona, defining a user journey and designing a user experience that would keep them engaged with the product. PMs must also communicate with the target audience through interviews, or surveys to gather requirements and feedback.
- Product research: After creating the user persona, the PM must understand what features your customers want in order to meet their needs.
- Product design (include work with designers): This is where you create a prototype of your product before manufacturing it for sale. The PM must work together with users to test functionality and see if the product works as intended. They must also take note of the usability and how user-friendly the product is.
- Planning:
- Creating an action plan and timeline for development, including milestones and deliverables
- Define the scope of work, manage budgets, resources and schedules for each phase of development
- Product launch: Determine when and where you’ll launch your product, as well as how much to charge for it.
- Identify risks associated with each phase of development.
- Creating an early-stage product roadmap that outlines how features will be built out over time
- Carry out beta testing
Marketing strategies in development stage
The development stage is where you develop a marketing plan that will help you sell as many units as possible in the early stages of its life cycle. Marketing strategies at this stage include the following:
- Setting goals for all marketing activities
- Creating brand awareness and establishing credibility from social proof, testimonials and endorsement of industry experts.
- Identifying how to attract new customers including marketing strategies, messages, channels and tools to reach target audience
- Defining your marketing budget and what to spend ad budget on
Introduction Stage
The introduction stage is the second stage of a product’s life cycle. It is marked by the release of the new product to the market and ends when the target market has accepted the product and its benefits.
In this stage, you should be focused on getting your product out there to as many people as possible, but also make sure that it achieves a product-market fit for your target audience. If it doesn’t, your product will have a high churn rate, and people will move on to another product.
Responsibilities of the PM in introduction stage
As a product manager, during the introduction stage, your responsibilities will include:
- Defining how your company will reach its target market and what needs to be done to accomplish this goal.
- Designing your product so that it meets customer needs, satisfies customer expectations, and is easy to use.
- Creating and executing a go-to-market strategy for the product.
- Collaborate with design and engineering teams to enhance product functionality to meet customer needs and expectations.
- Track sales data and collect customer feedback to determine if the product is successful and identify any areas for improvement.
Marketing strategies in introduction stage
This is where the real work begins. After the product is launched, you can start marketing it to your target audience using social media ads, content marketing, and influencer marketing. You can also set up a freemium model so people can try your product before buying it.
Customer education is also important at this stage. Be sure to provide a knowledge base full of self-help content so that customers can quickly resolve any issues they encounter.
Growth Stage
In the growth stage, a product that is new to the market will exhibit rapid growth in sales and market share. Companies focus on increasing sales by creating more demand for their products and breaking into new market segments that are untapped.
At this stage, you should keep introducing new features that add value to existing ones and keep up with current trends in your industry. You may also attempt to expand into other markets.
During this time, you will be focusing on gaining sales by attracting more customers to your business through advertising and marketing campaigns.
If you are already successful in your industry, then you may want to consider moving into a new growth stage when your product reaches maturity or when demand for your product has reached its peak.
Responsibilities of the PM in Growth stage
During the growth stage, the PM is responsible for:
- Developing and implementing new marketing strategies to help promote and grow the product.
- Identify market expansion opportunities to meet growing customer demand
- Measuring sales performance
- Prioritizing resources according to business needs.
- Ensure that product adoption takes place
- Update and release product features to keep existing customers and attract new ones.
- Identify new distribution channels so that products are available when needed by customers.
- Track product data like customer satisfaction, stickiness, expansion revenue to make informed decisions based on customer needs and wants.
- Scale customer support systems with in-app resource center, in-app guides and self-help content
Marketing strategies in the growth stage
In this stage, companies should focus on creating marketing campaigns that differentiate their product from the competition. Building a brand presence is essential, and establishing credibility through social proof and testimonials is key.
Prioritize long-term distribution channels like Youtube and SEO to publish how-to guides, case studies, and self-help resources. But don’t leave out social media and ads.
Maturity Stage
After a period of rapid growth, a product enters the maturity stage. Maturity refers to the period when demand has stabilized at a higher level than supply can meet, resulting in declining prices and excess inventories.
In this phase, sales are stagnant and usage could decline as the market matures and competing products enter the market.
Responsibilities of the PM in Maturity stage
As the product matures, the PM’s responsibilities will change. In the maturity stage, the PM’s primary focus will be on:
- Sustaining the product’s success and managing its evolution. This will involve managing the product’s roadmap, release schedule, and support infrastructure.
- Ensuring that the product continues to meet customer needs and expectations.
- Develop new marketing plan to suit growing customer base
- Discover more product use case to market to a new audience
- Improving user experience across all touchpoints of the user journey
- Explore new cross-promotion and partnership opportunities
- Increase customer retention through retention strategies like referral programs, personalized experiences, or email marketing.
Marketing strategies in maturity stage
When your product reaches a maturity stage, sales stagnate. You need to think about how to target your product to new markets, how to differentiate your product from competitors, and how to continue to generate demand. It’s also important to think about how to manage your product’s price in the face of intensifying competition.
Saturation Stage
In the saturation phase, the volume of a product has been maximized. This can be caused by new technology, increased competition, or a change in customer base.
At this point, a product can achieve more growth by retaining more customers or by attracting new customers through differentiation. Creative marketing can make your product more attractive to new customers, but adding more functionality can also encourage existing customers to stick with your product.
Another way to overcome a saturated market is to pay attention to the little things. For example, telling your brand story, prioritizing customer service, and doing cross-promotions are ways to keep more people engaged with your brand.
Responsibilities of the PM in Saturation stage
In the saturation stage, the product manager is responsible for:
- Improving customer satisfaction
- Collecting customer feedbacks at multiple touch points to optimize your product
- Create a pricing strategy that works for various user segments.
- Research customer needs and user expectations and tailor the product to meet those expectations.
- Target new market and sub-niches
Marketing strategies in saturation stage
In a saturated market, you’ll need to pay more attention to differentiating your brand and your product. Focus on finding your unique selling proposition, finding your own niche, and creating strong brand awareness.
Also, prioritize the customer’s needs above everything else. Offer value upfront so that customers feel like they’re getting more from you. Stay focused on creating brand authenticity, improving customer service, and simplifying the user’s experience to keep users coming back.
Decline Stage
Eventually, the market for a mature product disappears as consumers turn their attention to newer products with better features. At this point, a company can either maximize their product’s functionalities or watch as customers churn.
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Once a product reaches this point, it must either be withdrawn or repositioned in order to keep up with consumer demand. Indicators of this stage include a high level of competition, a decline in sales, a high level of churn, and low customer satisfaction.
Responsibilities of the PM in Decline stage
As the product enters the decline stage, the PM’s responsibilities will shift from growth and maintenance to wind-down and retirement. The PM will be responsible for:
- managing the product’s end-of-life process, including decommissioning the product, transitioning customers to new products, and disposing of any remaining inventory.
- The PM will also be responsible for documenting the product’s history and achievements.
- introduces changes to its products and services so that they are better adapted to changing customer needs and expectations.
- Exploring new use case or functionality to enter a new market
- Create an offboarding process to collect customer feedback on product improvement
- Sunsetting features with low engagement
Marketing strategies in decline stage
During the decline stage of a product’s life cycle, marketing strategies are focused on maintaining the product’s sales and profitability. The challenge is to create a unique proposition that will be attractive to new customers while maintaining sales among existing customers.
At this point, you should be focusing on three things:
- Staying ahead of the competition by offering new features or functionality that customers will love.
- Addressing customer problems and complaints with fixes or upgrades that make your product better than what your competitors are offering.
- Continuing to support your existing customers through ongoing updates and upgrades that keep them coming back for more.
How to identify Product lifecycle Stages
Product lifecycle stages can be identified by evaluating KPIs and tracking product metrics. With this data, you can understand how people are interacting with your product, what keeps users coming back, and more importantly, how many users are coming back.
Some important metrics to measure are acquisition, adoption, activation, engagement, retention, and monetization. Define these metrics and interpret what they mean for product performance.
What Affects Product lifecycle?
There are many factors that can affect the product lifecycle. Some of these factors include the market’s adoption, ease of product use, changes in consumer preference, changes in the market, market size, and availability of substitutes.
Conclusion
The product lifecycle is an important concept for all companies, but more importantly, it can help you understand the process by which your company manages its products.
Managing a product throughout its lifecycle can be complex, but you can track your product’s lifecycle through every stage and implement changes accordingly.
