bob-cannon

Why

Product Marketing Strategy helps manufacturers with product marketing, product strategy, and marketing strategy to maximize profitability over the product life cycle.

Growth, Maturity & Decline

Intro, Growth, Maturity and Decline of the Product Life CycleGrowth, Maturity and Decline are the product life cycle stages that follow the solution stage.

Growth Stage

The growth stage is where the rising tide of consumer interest lifts the boats of all participants. If there were no competitors in the introduction stage, they are now a factor. Consequently, additional product features and support may be needed. Prices are steady to declining, as every participant in the industry is focused on market share and becoming the low-cost producer. Costs are declining with increasing volumes, and profits are improving. Distribution is increasing as well. Competitors are attracted to enter the market.

Usually this is the stage that requires the heaviest investment in marketing to educate, build share and support sales activity. While a marketing plan was developed in the introduction stage, adjustments to the marketing mix are usually required in the growth stage.

The marketing mix includes 4 Ps – product, price, place  (distribution) and promotion. During the growth stage, place becomes a hot bed of activity. Frequently this involves – or will in the maturity stage – changes to product, price and promotion. The product may need modification for new markets with different packaging, warranty, and service requirements. Price may come into play not just as list price but in discounts, financing, terms, and other options. Promotion activities such as advertising and public relations will change as new channels of distribution are entered and need to be supported.

Maturity Stage

The market maturity stage occurs when the market has become saturated. Sales growth rate tends to decrease. Efforts are focused on differentiation of the product. Pricing may be lower because of increased competition. More internal pressure is placed on reducing costs. margins begin to shrink as marginal competitors are forced out of the market. Distribution is maxed, and promotions come into play as a way to encourage preference over competing products.

Market share becomes the main focus in the maturity stage. The market is well established. There are numerous players, although some have started falling by the wayside, and the competitive pressures are building. If your profits are steady or increasing, regardless of where you are on the product life cycle, you are well positioned. On the other hand, if profits are flat or decreasing, then it is time to take action.

Decline Stage 

The market decline is recognized by the downturn in the demand for the product. It may be hastened by the introduction of an innovative new product or changing consumer tastes. As volume declines, competitors focus on maintaining market share while maximizing profits. Efforts are concentrated on rejuvenating the product by adding features and finding new uses. Intense competitive pressures may result in the withdrawal of more products from the market.

Strategies may change or remain the same in the other stages, but action is critical in this stage. It does not necessarily mean it is time to abandon your product altogether, but it might. Certainly if it generates a profit, or can be made to generate a profit with an infusion of capital that can achieve a reasonable pay back, then by all means harvest the profits while you can.

Without understanding the growth, maturity and decline of the product life cycle, marketers are flying blind. Strategic decisions made under these circumstances tend to be short-term and not much more than guesses. Using the product life cycle as a tool for evaluating your current business situation facilitates a longer term perspective and can point out options for future strategic decisions.

head-and-sholders  Robert Cannon

   With over 30 years of expertise in marketing, and leadership, Bob creates innovative systems, 
   products and services for small to mid-size manufacturers. Contact Bob today for more information 
   on the Cannon Advantage services and solutions.