Question

How do you manage products (sell products) that are in the introduction, growth, maturity, and decline stages? What can we do in each stage to help them become successful? What pushes a product into decline?

Answer 1

It is very important to manage product sales in every stage of the product life cycle effectively. The product life cycle varies for different products and product categories. We will take a generic scenario and will discuss each stage separately:

1. Introduction stage: Bringing a new product to the market is hidden with unknowns, uncertainties, and frequently unknowable risks.  An organization needs to manage enough distribution outlets to get the product or service to the customers. Channel partners as well as need to be properly educated about the product features. It is very important to understand the demand and supply ratio for the smooth operations of the product. It is the stage to understand consumer behavior and the right customers for the launched product. Frequent product modifications, price penetration, heavy promotions are needed to expand the product reach and increase the sales volume.

2. Growth stage: If the product is accepted in by the consumers and markets, It advances into the growth stage of PLC. Distribution plays a major role in the success of the growth stage. Companies scramble to acquire dealers and distributors and to build long-term relationships. it is impossible to establish a strong market position without adequate distribution. It is very important to understand the pricing strategy and competitor strategy to push this product more aggressively in the marketplace. Promotion strategies should be well-targeted and should be helpful in brand building.

3. Maturity stage: sales volume used to increase as the product reaches market saturation during the growth stage. There is fierce competition between the companies to become product market leaders and increase the market share. It is very important to understand the consumer taste until this stage and launch an extended product line to increase the consumer base. The strategies promote the products mostly focus on value and benefits that give the offering a competitive advantage. The promotions aimed at a company’s distributors needed to increase during this stage. Companies need to plan strategies to extend the maturity stage.

4. Decline Stage: When the sales figure starts declining and profit falls, then the product has entered into the last stage of the PLC. companies start reducing their promotional expenditures on products and the number of distribution outlets in which they are sold. They use to slash prices to get more customers for inventory clearance. The decline phase is governed by factors like change in customer taste, technological advancements and competitive scenarios. Organizations may draw a plan to get potential buyers to sell the brand and generate additional revenue.

Changes in consumer tastes, new technologies, better available alternatives lead the products to enter into decline phases. Technical products such as cameras, phones, Softwares lead to very short PLC due to fast-changing technology and fierce competitions. It is very important to alter the product at the maturity stage to increase the product life cycle. Concentrated at fewer hands, depressed price. less repetitive consumers are the early signs of decline stage. The entire PLC cycle requires a proactive approach to extend the product profitability and sales volume of the organization.