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From start to end – the “life” of a product

In the last years, product lifecycle management, the integration of all information during a product’s lifecycle has become more and more important. That opens the question, what exactly is the lifecycle of a product?

The product lifecycle describes the different stages of a product from the market entrance until degeneration.

First one is the market introduction. Typical for this stage is that a company wants to build awareness for its new product. Launching a new product means the company has to spend a lot of money: cost for development, research and marketing are very high. At this stage, the market decides if the product is accepted. Then sales increases. The competition is still low.

The next phase is the growth stage, which might already generate a net profit if sales and profit grow rapidly. Production numbers rise and unit costs decrease. So the profit margins increase. The company yet has high costs as marketing has to be intensified to reach the maximum potential and to gain higher market shares.

The third one, the maturity stage is characterized by a strong product, which is now established in the market. Sales and profit still rise and then reach the maximum. During this stage, competition grows as other, similar products are introduced to the market. The company has to invest in marketing and product improvements to assert itself against competitors. The company tries to hold the market share and has to increase productivity to gain profit, as the price is under pressure because of the competitors.

The product reaches the stage of saturation, which is characterized by falling sales and profits, high competition and relaunches or variations of the product to extend the lifecycle.

From MOBA-Matic-I to the MOBA-matic-II

In the decline stage, the market share shrinks, either due to competing products or due to saturation, which means all potential customers already bought the product. The company can still profit from the product by less-expensive production or by other markets, but sales drop rapidly and at last the product is eliminated.

Source: Anand Subramaniam


The lifetime of a product lifecycle varies from product to product and sometimes the stages cannot clearly be differentiated. While some products stay in the market, especially brands in the consumer market, for example food brands, others are eliminated rapidly, for example fashion. Customers and competition as well as other factors like economy, laws, sales strategy and others have great influence on the product lifecycle. 

FrankSchnee 12.01.2018 0 651
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