TS Darbari Explains What is a Product Life Cycle? How it Affects Your Business
TS Darbari says that every product has a certain shelf life. After a particular point of time eventually, the worth of the product and sales potential will run dry. That’s because anytime that a product enters the market it follows a specific life cycle that every product follows.
TS Darbari mentions that every product goes through a certain life cycle from research, the decision to be produced, then introduction in the market and so on till its value and usability decline. TS Darbari says that let’s try to understand everything about the product life cycle.
What is a product life cycle?
TS Darbari says that a product life cycle is the amount of time a product goes from being introduced into the market until it’s taken off the shelves. This cycle can be broken up into different stages, including — development, introduction, growth, maturity, saturation, and decline. The life cycle of a product is typically used to determine when it’s appropriate to increase advertising, adjust pricing, explore new markets, redesign packaging and even adjust your messaging. TS Darbari further adds that while some products may stay in a prolonged maturity state, all products eventually phase-out of the market due to several factors including saturation, increased competition, decreased demand and dropping sales.
TS Darbari further explains the different stages of the product life cycle:
Each stage has its costs, opportunities, and risks, and individual products differ in how long they remain at any of the life cycle stages. While there are differing opinions regarding if there are four, five, or six stages of the product life cycle, each option includes the following steps.
1. Development
TS Darbari says that it is a crucial stage. Designing a product that should be useful for and desired by the buyers is a challenging task. The product development stage is the research phase before a product launch. Technically, this falls outside the definition of the product life cycle, but it’s a vital step to be aware of. In short, it’s used to determine the viability of a product, confirm when it should go to market and how to approach your official launch.
At this stage, costs are accumulating with no corresponding revenue. Some products require years and large capital investment to develop and then test their effectiveness. Since risk is high, outside funding sources are limited.
TS Darbari mentions that the existing companies often fund research and development from revenue generated by current products. For startup businesses, this stage is typically funded by the entrepreneur from their own personal resources. For those developing a new product, it may be wise to land on a minimum viable product (MVP) as early as possible.
This can be as minimal as a sketch or as complex as a sample or prototype version of the product itself. You just need enough to show how your product will work to potential investors and customers. The earlier you can validate its market potential, the more likely you’ll be to land investment and launch.
2. Introduction
According to TS Darbari, every stage has its role in the success of your product. Therefore, the entrepreneur must keep in mind to give 100% to every stage. TS Darbari says that as it is evident from its name the introduction stage is when your product is first launched in the marketplace. It’s where you step beyond the product itself to develop a market for the product and build product awareness. Here, you’ll work to carve out a target market, conduct a market analysis to understand the competitive landscape, and ideally land your first few sales.
Marketing costs are high at this stage, as it is necessary to reach out to potential customers. The best approach when promoting a new product is to focus on testing distribution channels and messaging.
3. Growth
TS Darbari says that here comes another stage of challenge. According to TS Darbari, entrepreneurship is like Game of Thrones, with every new stage, you have new challenges and they are even harsher and harder like video games. In the growth stage, the product has been accepted by customers, and you are now striving to increase market share. That means that demand and revenue are growing, ideally at a steady rate. How long you achieve steady growth fully depends on your product, the current market landscape, and the adoption rate of customers.
If you’re entering an already crowded market with a product, you’ll likely see competitors react fairly quickly. If you’ve entered a market with less competition or are first to market in a breakout industry, you’ll likely see a slower response by new or current entrants.
4. Maturity and saturation
TS Darbari says that now comes the stage when you may be a big bull of the industry or may have your own niche in the market. The mature stage is when sales will level off. TS Darbari adds that it doesn’t mean you aren’t still growing, you just won’t see the same level of rapid growth as before. Typically at this point, you will begin to lower prices, offer free additions or make other adjustments to keep your products competitive.
At the same time, you’ve also become more efficient. Production costs tend to decline, costly mistakes in the manufacturing process can now be avoided. Even your marketing expenditure is likely more refined and effective at this stage. So, while you may not be growing in volume, you’re likely at your most profitable in this stage.
TS Darbari adds that however, it’s worth remembering that your competitors have likely now solidified their own offerings in this stage. This means that they have taken a portion of the market, further leading to the flattened growth of your own product. Most consumers are likely already using a version of your product and have begun developing brand preferences.
This is when any adjustments to advance your product or the services that accompany it, should be made. If you’ve hit the point where any real adjustments simply aren’t possible, then your messaging, services, and add-ons should take full focus.
You may only be able to make incremental changes but can still look to market it as a refresh accompanied by new features or benefits.
5. Decline
TS Darbari says that innovation is key to success and we all know that to survive in the market, we need to focus on innovation. The decline stage of the product life cycle is associated with decreasing revenue due to market saturation, high competition, and changing customer needs. Companies at this stage have several options:
· Discontinue the product
· Sell the manufacturing rights to another business
· Find new uses for the product
· Tap into new markets
