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You may know of a commonly used product life cycle that starts from the premise that a product is in the market. It has four phases:
- Introduction: The goal in this phase is to build market awareness for the product. The job here is to educate customers as to the value of the product.
- Growth: During the growth phase, the company is guiding market share and creating brand preference in the eyes of the customer.
- Maturity: Strong growth slows, and the product may encounter much more competition. If your product has good market share, you need to defend it. If your product is new in this market, your chances of success are diminished unless your product is vastly better. Even then, the cost of marketing a new product from a new provider in a mature market is expensive. Products can remain in the mature phase for a long time. Arguably, lightbulbs have been in a mature market for over 100 years. As new technology arrives, customers need to understand only the difference in technology and pricing to buy the new products; they already understand why they need lightbulbs in general. The actual companies that play in this market are remarkably stable.
- Decline: As sales decline, companies have a limited set of choices. One is to maintain the existing product and sell what they can. Another alternative is to reduce costs and focus sales to a loyal niche segment. And another option is that the company decides to discontinue the product or sell it to another company who is interested in remaining in the market.
The four-phase cycle is a useful tool for understanding what works best in gaining ground for your product at particular points in time. In fact, another name for this life cycle is the industry life cycle or market life cycle. The four-phase life cycle doesn’t have decision points between each phase. Instead, you emphasize different aspects of marketing and sales activities at each phase.