The length of a Lifecycle varies from product to product. It will range from a few weeks or a few short seasons (for a fad or clothing fashion) to decades (for cars or telephones). Each part of the Lifecycle does not take an equal amount of time. Generally however, product Lifecycles are getting shorter. Rapid changes in technology can make a product obsolete overnight. Also, if competitors can quickly introduce ‘me too’ versions of a popular product into the market, it could move the product swiftly into the Maturity stage. The current Lifecycle of a mobile phone is roughly 35 days before the manufacturer stops producing the model and introduces a newer model – and this cycle will become shorter still in the future. Some products will even fail in the Introduction stage, while others will not be introduced until the market is in the Growth or Maturity stages. In most cases, however, decline and possible abandonment of a product is inevitable.
It is important to create both an Industry and a Product Lifecycle chart for your organisation’s products. This is because even though some products can be in a declining industry they are still in the growth stage of their Lifecycle. The soft drink industry, a very mature industry, is an example of this. Every few year’s manufacturers will introduce a new product, and this new product then has its own Lifecycle. Cola, for example, has been released in numerous variations, including cherry cola, diet cola, caffeine-free cola, vanilla cola, cola with lemon, cola with a lime twist, diet cola with vanilla, cola with zero sugar and a tropical version of cola, to name just a few.
Each of these products is going through or has gone through their own Lifecycle.
A product might be well accepted and be in the Growth or Maturity stages in a number of markets, but simultaneously in the Introduction stage in others. For example, sophisticated video conferencing is in the Growth/Maturity stage in the business market, yet it is only in the very early Introduction stage of the home market. In terms of the international market, a product might be in its Maturity stage in one country and in the Introduction stage in another – it might even be altogether unknown. So what strategies can you undertake to manipulate the Lifecycle of your product to gain the maximum profit for your organisation?
You can shorten the Introduction period, for instance, by broadening the product’s distribution or by increasing your promotional efforts early in its Lifecycle. An organisation entering a new market must decide whether to plunge in head first during the Introduction stage of a new product. Or to hold off, and enter during the early part of the Growth stage, after innovating companies have proved that there is a viable market.
The strategy of entering during the Introduction stage is based on the idea of building a dominant market position, thereby lessening the effectiveness of competition. During the Growth stage, an organisation needs to choose the right strategy. The strategy put in place during this stage will often determine the long-term success of the product. It is during the Growth stage that an organisation has to refine and confirm its target market, expand distribution channels, look at product improvement to meet the needs of the market, and possibly adjust the price of the product in accordance with competing products being released.
When an organisation’s product enters the Maturity stage, there are a few different strategies that they can try. They can modify a product and give it a new Lifecycle, devise new uses for the product or otherwise increase promotion of the product. The sales Decline stage poses the greatest challenges for Lifecycle management. You will have to decide whether to continue promoting the product or to drop it altogether. During this stage, an organisation can improve the product’s features, give it a style, make sure that all of the processes in creating the product are as efficient as possible, drop lines of the product that aren’t selling as much as others, or simply drop the product altogether and move onto a new one. Knowing when to drop a product is just as important as knowing when to introduce it into the market.
It is also important to determine the window of opportunity, and then see if you are too early, too late or in the right position to take advantage of the idea. If you are too early or too late, cash flow will not happen. Oh no, how can you then be happy? After all happiness is a positive cash flow.