Boost Your Revenues and Profits with a Product Life Cycle Analysis.

Most marketing executives are by now familiar with the concept of the product life cycle and product life cycle analysis.

Evaluating the performance of the product portfolio provides management with information to guide product strategies of new products, product modifications, and product elimination.

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What is the product life cycle?

The product life cycle is an essential concept in marketing. Does it describe the stages a product goes through from when it was first thought of until it finally is removed from the market?

The strategic analysis of existing products requires tracking the performance of the products in the portfolio, shown in Exhibit 1.

Tracking Product Performance
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Marketing management must establish the parameters and levels of performance for gauging product performance. The life cycle analysis of a product helps you determine what the next steps are in its journey.

The final decline stage of the product life cycle might lead to retirement or product upgrade. That is why the product life cycle analysis is so critical.

These may include both financial and non-financial factors. The demand and cost interrelationships among products, an information system is needed.

A system like marketing analytics platforms to measure how well a particular product is doing.

Marketing analytic systems provide that help and include companies like Adobe Analytics, Google, and Cherwell Software. These systems can help evaluate your products in the mix. These systems are essential for both B2B and B2C companies.

Boost Your Revenues and Profits with a Product Life Cycle Analysis. Click To Tweet

The purpose of the tracking system is to maintain a product review process that will spot problem products. Marketing management can use analytic reports to help select a strategy for eliminating the problem.

Corrective actions may include adding new products, cost reduction, product Improvement, marketing strategy changes, or product elimination.

I used several methods to perform a strategic analysis of our product portfolio. Product life cycle analysis, product portfolio analysis, and positioning analysis will be discussed.

It will explain the kinds of information used in analyzing product performance and identifying product strategy options.

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Product Life Cycle

If you’ve read some of my posts before then you will understand the product life cycle. However, let me explain it again. So, before we get too far into the discussion it’s important that you understand what the product life cycle is. Products, like people, move through life cycles.  

The product type or a variant of interest should correspond to a defined market need. Life cycle analysis can also focus on a market segment within a product market.

Sales began when the product is introduced and increased over time. Profits initially leg behind sales since heavy introductory expenses often exceed sales during the initial stage. Industry sales and profits decline after the product reaches maturity. Often profits fall off before sales.

Product Life Cycle Stages
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The product life cycle portrays the sales history of a typical product by following an S-shaped curve. The curve is typically divided into four stages known as introduction, growth, maturity, and decline.

  • Introduction Stage. This stage has a period of slow sales growth as the product is introduced in the market. Early adopters are the first to buy. Profits are inconsistent in the stage because of the heavy expense of product introduction.
  • Growth Stage. This stage shows rapid market acceptance and profit improvement.
  • Maturity Stage. The period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased marketing outlays to defend the product against the competition.
  • Decline Stage. The period when sales show a downward trend and profits decline.

Product Life Cycle Analysis

The product life cycle has several major stages and includes introduction, growth, maturity, and decline.

The important strategic issue in product life cycle analysis include:

  • Determining the length and rate of change of the product lifecycle.
  • Identifying the current product life stage and selecting the product strategy that corresponds to that stage.
  • Anticipating strategic threats and finding opportunities for changing and extending the product life cycle.

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Rate of Change

The length of product life cycles is becoming shorter for many products. Microbrands are popping up every day like Casper Mattresses and Kylie Cosmetics, have become overnight successes. There are, of course, the wide variations in the length of the product life cycle stages for particular products.

Determining the rate of change of the product life cycle is important. Marketing management must adjust its marketing strategy to correspond to the changing conditions.

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In short and rapidly changing product life cycle requires modifying marketing strategies in a dynamic environment.  For example, the product life cycle for computers is relatively short.

In a few years, the product moved from its introduction into the growth stage, and now it is moving toward maturity. Fast movement through the product life cycle also creates the need to alter the cycle and/or introduce new products.

Stages and Strategy Identification

marketing product stage
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Now we focus on the product life cycle (PLC). The product life cycle portrays distinct stages in the sales history of a product.

Corresponding to these stages are distinct opportunities and problems with respect to marketing strategy and profit potential. By identifying the stage that a product is in, or maybe headed toward, companies can formulate better marketing plans.

The product life cycle stage of the product has implications regarding all aspects of targeting and positioning.  

And analysis for selecting strategies for different situations, including the product life cycle stage of the product is critical. As the product move through the PLC strategy zones can be defined for each stage.

The product type or a variant of interest should correspond to a defined market need. Click To Tweet

The strategy guidelines indicate the changing focus of marketing strategy over the product life cycle.

It is not always clear where our product is positioned in its product life cycle at a specific point in time. Analysis of the growth rate, sales trends, time since introduction, the intensity of competition, pricing strategies, end competitor entry or exit information is useful in positioning analysis.

Identifying when the product has moved from growth to maturity is more difficult than determining other stage positions. Also important is the analysis of industry structure and competition in estimating when a product has reached maturity.

product lifecycle analysis
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Product Life Cycle Planning Model

Predicting the sales revenue of a product and identifying the factors that influence the shape and amplitude of the volume projections are important. A product life cycle model is used for short and long-range planning for both B2B and B2C businesses.

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The model was designed for evaluating new product development projects. This modeling approach appears useful for predicting the product life cycle of an existing product as well. Estimating the timing and magnitude of the turning points of a successful product introduction is perfect for this model.

The product life cycle model determines sales volume by combining estimates of original purchases and replacements. Original purchases are forecasted using three predictor variables:

  • Consumer need
  • Number of competitors
  • Amount of advertising and promotional effort

Replacement estimates are a function of the products:

  • Useful life, the percent of owners who will replace it
  • The trade-off of repair versus replacement
  • Or the level of the initial purchases.

The validity test of the model predictions against actual product life cycles indicates a close correspondence between product life cycle shapes.

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Product Portfolio Analysis

The strategic analysis of the product portfolio determines if each product is measuring up to marketing management’s minimum performance criteria.

An assessment of the strengths and weaknesses of the product relative to other products in the portfolio is reviewed as well.  A comparative analysis of products can be done with the grid method.

Portfolio grids show the differences among products. An analysis of performance factors may include the following:

  • Sales fluctuations
  • Profit contribution
  • Barriers to entry
  • The extent of capacity utilization
  • The nature of technology
  • Responsiveness of sales to price, promotional activities, service levels, and other influences
  • Alternative production and process opportunities
  • Environmental considerations

Several of these factors may be included in the product life cycle analysis. the great analysis can also compare competing brands of a particular product.

This type of analysis may be useful when brands are targeting different market segments. However, the market attractiveness dimensions of the grid will be constant across all brands targeting the market.

Positioning Analysis

Product Portfolio Analysis
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Perceptual Maps offer powerful analysis tools for assessing products. The map is developed by obtaining preference information on a set of competing brands or companies from a sample of buyers.

Various product attributes are used, and the results are summarized in a two-dimensional preference map.

Competitive mapping analysis offers useful guidelines for strategic product positioning. The analysis can relate buyer preferences to different brands and indicate possible brand repositioning options.

The new product opportunities may also be identified through the analysis of preference maps. Positioning studies overtime can measure the impact of repositioning strategies.

perceptual maps positioning
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Other Product Analysis Methods

Other product analysis methods include research studies that identify the relative importance of product selection criteria to buyers and rate brands against these criteria.

These techniques are useful in indicating brand strengths and weaknesses. Industry analysts (e.g., IDC and Gartner) and industry trade publications also publish market share and other brand performance data.

Product rating services such as those offered by Consumer Reports also provide useful evaluations of brands and products.

Online reviews can tell a lot about a product. Websites like G2Crowd and Capterra are great resources I use all the time.

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Wrap Up

Products and markets have life cycles that call for changing marketing strategies over time. Every new product follows the product life cycle. It passes through the stages of emergence, accelerating growth phase, declining growth, maturity, and decline.

Companies must try to anticipate new add product attributes that the market wants. Profits go to those who introduced new.

Search for customer value benefits for new attributes can be based on empirical work, intuition, or needs hierarchy reasoning. successful marketing comes through creativity visualizing the market’s evolutionary potential. and this is where product portfolio analysis can be used for the product life cycle.

When was the last time you did a product life cycle analysis?

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General FAQ’s

What is the product life cycle analysis?

The product life cycle analysis is a technique used to plot the progress of a product through its life span. The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. The life cycle has four stages – introduction, growth, maturity, and decline.
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.


Why is a product life cycle analysis important?

The product life cycle is an essential concept in marketing. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market.


What is the purpose of the product life cycle?

The product life cycle is a necessary process in the management of any product and revolves around the introduction, growth, maturity, and decline stages. For emerging businesses, the product life cycle concept is an ideal tool that enables marketers to forecast future sales and plan new marketing strategies.

2021 Product Life Cycle Examples?

Example of the Product Life Cycle 2021
Introduction – Electric self-driving cars. Electric self-driving cars are still at the testing stage, but firms hope to sell to early adopters. Watch VW ID.4, Bollinger B1 / B2, Ford Mustang Mach-E, Audi Q4 e-tron , and Q4 Sportback e-tron.
Growth – Electric cars. For example, the Tesla Model S is in its growth phase.
Maturity – Ford Focus and Honda Accord.
Decline – Diesel cars.

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