Do you aim to create a successful digital product? Then, knowing a product life cycle explanation is a must for you.
But why should you care about it first? Let’s briefly elaborate on that.
You’ve probably noticed that some software remains popular for a long period and, accordingly, brings stable profits to its owners. Perhaps, you also don’t want your product to become outdated quickly. That’s why you should know about product life cycle stages and strategies.
Companies that already understand the importance of this approach contribute to the rapid growth of the product life cycle management (PLM) market. As a result, it will reach over $26 billion by 2026.
Today we’ll explain what product life cycle and its importance are. Arounda, a company that provides full-cycle software development services, is well-versed in this topic. In this article, we’ll share the main stages and examples of the product life cycle.
Let’s start with a short explanation of product life cycle. Essentially, it is a sequence of stages. A product passes them from its inception to leaving the market at the end.
This concept was proposed by the famous American economist Raymond Vernon back in 1966. Now it is used by business owners and marketing specialists to make critical decisions about the product, such as the feasibility of reducing or increasing the price, the need to grow marketing efforts, the meaningfulness of the software’s entry into new markets, the need for a redesign, etc.
The product life cycle typically has five main stages. They are development, introduction, growth, maturity, and decline. Today we’ll discuss them in greater depth, but first, let’s define why using the product life cycle is helpful for businesses.
From the moment of creation, your digital product will change significantly throughout its life cycle. Market requirements and user needs will also alter.
The product life cycle concept will help you consider all these variables so that your software brings the most benefits and is in demand for as long as possible. For example, you will know exactly when to invest in advertising or when to introduce new product features.
The product life cycle concept will be handy for any business. But if you have doubts about whether to implement it in your processes, let’s see when you critically need it.
Product life cycle stages and marketing strategies go hand in hand. Depending on your software’s phase, you will plan your marketing efforts. For example, your strategy in the introduction phase will significantly differ from when your product reaches maturity.
Adopt a product life cycle to ensure your software prices are always in line with market needs. For example, at the introduction stage, the price can be lower, and when you attract a wider audience and your product reaches maturity, you can consider raising the price.
Let’s say you create a brand-new digital product and plan to enter a new market with it. Knowing the product life cycle will help you determine the best marketing strategies to make your software visible. And if you are already an experienced market player, you can confirm your authority, relying on the life cycle.
As a business owner, you should always be ahead of the curve. Isn’t it better to know when your software will start to decline and lose demand among users? Using the concept of the product life cycle, you can prepare for this moment and even delay it to get the most benefit before your software leaves the market.
As already mentioned, the product life cycle allows you to make strategic decisions about your software. At the same time, you will always consider the stages of the product and direct your efforts accordingly.
As we explained at the beginning of the article, the product life cycle consists of the following stages: development, introduction, growth, maturity, and decline. Each phase has its unique qualities that you should consider.
So, let’s proceed with our product life cycle 5 stages explanation.
This stage directly consists of your product development; at this time, you and the team turn your idea into reality. This phase can end in just a few months or stretch for several years until you bring your concept to perfection.
What happens at this stage?
Your team goes through a standard product development process with all its steps:
First, you brainstorm product ideas with your team and stakeholders. You also think through the goals of your software and determine its strengths and weaknesses.
Next, your specialists conduct market research and study your direct and indirect competitors and target audience.
After that, your specialists work on product design. Initially, they create wireframes, information architecture, and mockups. Next comes the development of prototypes and rolling out the final version of the design.
Then there is the direct development of the product, namely the delivery of the frontend and backend.
Next, your product is tested by quality assurance specialists to make your software flawless.
As a result of this stage, you get a clear understanding of your product goals, ready-made documentation with a list of the main features, technologies, and design, and a plan for releasing your software to the market.
This product life cycle stage involves rolling your software out to the market.
What is your team working on at this phase?
Since you’ve developed your go-to-market strategy at the first stage, your employees can now implement it.
Your marketing specialists take care of the marketing efforts to promote the product and increase its demand. In addition, this stage requires marketers to convert interest in your software into actual sales and find appropriate distribution channels for this.
Once you have passed the introduction stage, you will eventually move into the growth phase of your product. It’s the moment when your marketing and development efforts have paid off, and now your software is popular. At this stage, as a rule, the need for your product increases significantly, and its sales boost accordingly.
So what now? Can your team finally relax? No, not at all. While this stage brings a lot of satisfaction in the form of grown profits and a wider audience, it also increases the level of competition.
Your team should work on your product reputation and build brand presence. It is to encourage users to choose your software over competitors’ products.
The maturity stage means that your product has reached the maximum of its growth. In this phase, you will see stability in earnings and an established base of loyal customers.
What is your team doing at this stage?
First, your employees will learn from the mistakes they may have made in the previous phases.
Your specialists will also do everything to establish your product as a market leader.
Unfortunately, your software cannot stay relevant forever, and sooner or later, better alternatives will appear on the market. The good news is that by knowing about the product life cycle, you can properly prepare for the decline phase of your software.
So that the product leaves the market with pleasant memories, your team can broadcast the achievements of your software in marketing campaigns. Marketers can also focus on emotions, namely nostalgia.
Now you can look at a product life cycle diagram with explanation we’ve provided.
Now that you know the main stages, let’s look at product life cycle strategies with examples. We have prepared two cases for you.
When you ask yourself what is product life cycle example, you will probably recall the appearance of innovative devices that replaced their outdated predecessors.
The same thing happened with the appearance of the typewriter, which replaced pen and paper. This invention made it possible to increase the speed of writing significantly.
It took a long time to transform the idea of creating such a device into reality. The first commercial typewriter appeared in 1874, although its concept was considered as far back as 1575.
After its introduction to the market, this device became indispensable for many people dealing with writing.
The maturity phase lasted for typewriters until the 1990s.
And the decline of this device happened when the first computers appeared on the market.
Vine is an app for creating and sharing short videos. This software was founded in 2013 and gained considerable popularity in the same year. We can now observe the full life cycle of this product as the app has left the market.
When this application was introduced to the market, it attracted many users because, at that time, there was no similar software that offered to publish short clips.
A few years after its release, the application gathered more than 200 thousand active users — this was the stage of its growth.
Vine’s maturity stage came relatively quickly, and the application maintained a stable number of active users.
However, in 2016, the app declined as it failed to compete with Instagram, Snapchat, and Youtube.
By considering the product life cycle, you can develop your software and business according to the changing demands of the market and users. This approach contributes to creating more effective marketing and pricing strategies and helps you stand out from the competition.
We hope today’s article helped you understand the product life cycle explanation better. If you want to adopt such an approach, we’ve got you covered. Our company’s specialists know everything about creating and launching products, having over 130 successful projects in their portfolio.
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