The 5 stages of the product life cycle

Market research plays an integral role in each stage of the product life cycle. Use the ultimate guide to market research developed by SurveyMonkey to help you understand how research is key in managing the life cycle of your product.

Every product spends a different amount of time in each stage—so there is no definitive timeline to reference. Each stage has its own costs, risks, and opportunities, and you’ll have to adapt your strategies depending on where you are in the life cycle. 

1. Market development

The first stage in the product life cycle is development. This is where your market research journey begins. Before your product hits the marketplace, you will be refining your concept, testing your product, and creating a launch strategy. Concept testing with real potential users is an important part of this step. With concept testing, you’ll know your target market’s reaction to your concept and make changes according to their feedback—before you’ve even begun to create.

During this initial phase, you’ll encounter a lot of costs without producing any income from this new product. You may be funding this stage yourself or you may be seeking investors. Either way, the risk is high and outside funding is often limited. Market development can encompass anything from a brief sketch to a prototype of your product. All you need is enough to show potential investors and customers. Validate your market potential early, so you can begin raising funds to launch.

2. Market introduction

When your product launches, you’ve entered the introduction stage of the life cycle. Your marketing team will be focused on building product awareness and reaching your target market. Typically, all content marketing and inbound marketing are based on promoting the product. 

Depending on the complexity of your product, the competition, how new and innovative it is, and other factors, you may spend more time than you expected at this stage. The good news is that if you’re marketing is successful, you’ll move on to the next stage of growth.

Reach out to our sales team to learn more about product optimization after your product has been introduced to the market.

3.  Market growth

At this point in the life cycle, consumers have embraced your product and are buying into your marketing. Demand and profits are growing, and the competition is looking to interrupt your success. 

Marketing in this stage moves from getting attention from consumers to establishing a brand presence. Show them why they should choose you over the competition. As your company grows, you may add new features to your product, beef up your support services, and open new distribution channels. All of these efforts will feature solidly in your marketing.

4.  Maturity

When sales begin to level off from rapid growth, you’re entering the maturity stage. You may have to reduce prices to stay competitive. 

Now, your marketing campaigns focus on differentiation instead of awareness, pointing out your superior product features. During this stage, production costs decline and sales are steady. It’s tempting to sit back and enjoy the steady sales, but you must make ongoing improvements to your product and let consumers know that it’s continuing to get better.

At this point, market saturation can occur. Competitors have begun taking a portion of the market. Although many consumers are using the product, there are too many competitors. The only way out of this dilemma is to focus on your strengths—differentiation, features, brand awareness, price, and customer service—to become the brand of choice. If not, you’ll enter decline.

Reach out to our sales team if your product maturity has led you to re-evaluate your pricing for price sensitivity and Van Westendorp research.

5.  Market decline

If your brand isn’t a marketplace favorite, you’ll start to experience the last stage. You’ll be facing more competition, and they’ll be taking a share of the market. Sales will typically decrease in the face of rising competition. 

Market decline may be related to:

  • Too much competition from products with similar features 

If you can’t differentiate your product, you won’t be able to stand out in the crowd. Think about how the arrival of Facebook as a social media app affected the downfall of MySpace.

  • Outdated or replaced product 

This may be the case if you have a product that has hit the limit of its ability and is just no longer marketable. For example, VHS tapes hit this point when DVDs came out, and DVDs are reaching this stage as more people choose streaming entertainment. Ultimately, it was a bad day for Blockbuster, which was the largest video store in the US.

  • Loss of customer interest

In 2000, Heinz, the maker of food condiments and sauces, introduced EZ Squirt colorful ketchup. Initially, it was a huge success, but the novelty wore off and the product failed.

  • Damaged brand image
  • McDonald’s fast-food restaurants took a blow to their supersize menu after a documentary about the chain’s food affects overall health.

When a company sees market decline, leadership may discontinue the product, sell the company, or innovate the existing product. In the meantime, your marketing may try to foster nostalgia or the superiority of your product to extend the life cycle. 

Companies that are seeking new ways to grow and move out of market decline may try:

  • Extending the product line like soda brands Coca-Cola or Pepsi adding cherry, vanilla, and other flavors. 
  • Repackaging the product as in the example of Listerine, which was formerly a surgical antiseptic. Listerine was then repackaged and rebranded to become a mouthwash that cures bad breath.
  • Trying new pricing strategies as Dollar Shave Club did. The company uses subscription pricing as well as pricing based on the number of blades in each razor.
  • Launching new versions of the product like Apple, which maintains the hype with every new iPhone release.
  • Moving into new product categories would mean moving back to the beginning of the product life cycle—and sometimes that’s what it takes to survive. Nintendo is a great example of this. They went from making video arcade games to video game systems for personal use.