Well, the life cycle varies from product to product. There are products in the market that never change for ages and the company is still stable and strong in the market. Otherwise, there are products whose life cycle changes each season. For example, Coca-Cola®, Ovomaltine, Aspirin, Red Bull® are companies that can’t be easily replaced. In the other hand, cell phone and computer industries are continually being renewed. Apple, for example, they always staying their position because they are continuously innovating, every year something new comes in, so the company never gets the decline phase.

The management of a product life cycle can be divided into 5 phases:

I – Inauguration

II – Growth

III – Maturity

IV – Saturation

V – Degeneration

Image Source: https://marketing-insider.eu/characteristics-of-the-product-life-cycle-stages/

When an idea comes in, a new product is developed, and this product gets inaugurated in the market, what usually comes with high costs and almost no profits. Over time it receives the profit zones with the growth in sales and distribution, the product gets consolidated and requires a high investment in advertising sales promotions. Then the sales reach the peak, with a high volume, high profit and the competition for market share is unleashed. During the time, the market gets saturated, and the sales curves flatten out, and the profit decreases. With this starts the process of degeneration, and the product is replaced by something new. The saturation point is the moment for new ideas and launches new products.

The factors which are responsible for the life changes are:

Economical;

Technological;

Ecological &

Society

Therefore, it is essential for a company that its various services or products are not all in the same phase. The right timing is crucial to have a continuous business and constant cash flow. Otherwise, there is a risk that all products will enter the saturation or decline phase at the same time. By specific market research life cycle phases can be determined and the company can take actions accordingly

Image source cover: https://unsplash.com/@nkachanovskyyy

Lecture by: Juerg Schiess

Author: Catarina Soares Braga