Product lifecycle is the progression of a product from inception to decline. It helps manufacturers measure the stage of production, target marketing efforts, and strategically discontinue a product to introduce an updated or new version.
Product lifecycle is a business term that refers to the stages in the progression of a product, from the product’s inception to the time when the product begins to show inevitable signs of backsliding. A similar example is the life cycle of a butterfly: the processes it goes through, from fertilization to the formation of eggs, caterpillar, pupa and adult. Eventually, the butterfly will start to show signs of wear and tear until it dies. Knowing the various lifecycle stages, the signals to look for and what to expect can be compared to the product lifecycle in business. In this case, the subject is a product or service and the importance of this process includes the fact that it allows manufacturers and various companies to measure the stage of production, allowing you to apply the relevant marketing principles.
One role of the product lifecycle in business is its usefulness as a measure of the state of a product in correlation with the expectations of consumers and manufacturers. For example, it helps to consider the case of a product in the form of a smartphone that has been introduced to the market. The phone is eagerly received by consumers and hailed as the most innovative smartphone ever. As the months progress, other phone companies release their own similar versions of the smartphone, diminishing this particular smartphone’s dominance in the market. In addition, consumers already yearn for a smartphone that offers more than this one can.
Smartphone manufacturers know that they need to monitor the various indicators as the phone goes through its various stages in order to know when to discontinue the product and introduce another updated version of the phone, or a new one. This knowledge gives phone manufacturers a strategic advantage over other phone companies. It allows the company to get as much of the product as possible in terms of sales without losing competitive advantage over other companies, allowing the product to outlive its usefulness and possibly losing some customers to competitors with better products.
Another importance of the product lifecycle in business is that it allows the company to target its marketing effort based on the specific stage the product is in its lifecycle. For example, the marketing campaign at product introduction will differ to the type of marketing campaign during the middle of the product’s business lifecycle. Knowing this is a crucial factor in formulating marketing strategies.
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