By Daniel Lee | 10th November 2015
So, let us say that you have a wonderful new product idea, and you wish to further develop it. Without a doubt, you will want your product launch and brand to be successful. A good place to start will be to look at the product life cycle stages. A solid understanding of the product life cycles will do you a world of good as your product progresses towards launch and beyond. Understanding the stages in depth and using them to map out your business plan prior to further development will be vital in helping you to preempt the potential problems that might arise as a result. As your product launches and start to gain momentum in both sale and recognizability, the legwork you performed prior to launch will become more relevant than ever. Let us now explore the 4 stages of a product life cycle, starting with the introduction stage.
1. Introduction Stage
Typically, this stage will be the most costly for your business. Your consumers have not been educated about your product sufficiently, brand visibility is low, and if you have a niche product, your initial market size will also be low. The costs might start to pile up, i.e. in terms of research and development, marketing efforts, advertising, market research, consumer testing, applying for certification(s) etc. Initial efforts may have poor results, and things might seem to constantly work against your favor, especially if you are navigating past a highly competitive market. Many businesses do not make it past this point and end up writing the entire business plan as a loss, cutting their losses and moving on. Make sure to take most, if not all of the above factors into consideration before making your next move in order to be a step ahead of any potential setbacks.
2. Growth Stage
This is an exciting stage for your business, and possibly the most rewarding to you as an entrepreneur. Sales and profits are going up, your bottom line starts to shift towards a very enticing green, economies of scale starts to become a very promising thought and you find yourself with a stronger cash flow and funding to invest in increased promotional activity to further grow your business. At this stage, the scalability of your product is put to the test. Did you properly design your product for manufacturing? Did you subject your product to extensive testing? Did you build prototypes and explore variations in your product design in order to determine the best one? Was there a higher than usual defect rate during the first round of manufacturing? All of the above factors correlate directly with the success of your progression to the next growth phase, and there are many check boxes that need to be ticked in order for that to happen.
3. Maturity Stage
Your product is now further established with a strong market presence. Growth might start to stagnate and the emphasis now shifts to maintaining the market share that you have built up. The important thing here is to invest wisely into aspects such as marketing. You might want to take a closer look at your business’s value propositions and product/services in order to determine how best to maintain competitive advantage by introducing new improvements and modifications. At this stage, it is also helpful to reevaluate your supply chain in order to ensure that the processes are optimized, and also see where costs can be further reduced.
4. Decline Stage
Inevitably, the market for a product will start to experience shrinkage, which is also referred to as the decline stage. The shrinkage can be attributed to a variety of reasons such as market saturation and product switching. At this stage, it is still possible for businesses to make a profit by entering new markets, reducing production costs, innovate and to constantly introduce updated renditions of your existing products.
The product life cycle stages model is an important aspect for any business. A firm grasp of the concepts and the strategies to apply for each stage varies depending on what stage the product is in the life cycle. The application of the appropriate sales and marketing strategies, as well as the correct resources can make a world of difference for your business.
At Sourcing Overseas, we provided an end-to-end solution for all of your offshore manufacturing needs so that you can focus on what you do best; to grow your business, make sales and attract more investors! We consider all the aspects of your manufacturing needs and work with you at every stage to ensure that your product progresses from the conception to retail launch and beyond in a seamless manner. Contact us now to learn more.