How to apply material in Catia help

The product life cycle: what it is, 5 phases and examples

If you work in sales, you are familiar with the product life cycle.

The process describes the stages of a product from production to removal from the market.

But why should you know?

Because you need a different marketing and sales strategy for every phase your product goes through.

Do you think you could attract customers to your new product by using the same promotional strategies that you have been using for all other products for years?

At best, you are wasting great opportunities. In the worst case, you can shut down your company in the long term.

In this article I will go through the different phases a product goes through during its life cycle, share examples and explain how to apply the concept. Continue reading!

What is the product lifecycle?

The product life cycle is a concept from business administration that describes the process from production, market launch, growth, saturation to its removal from the market because nothing can be earned from the product.

It is the journey of the product, which we already know from marketing as a customer journey.

The concept was coined by Theodore Levitt, a German-American economist and professor at Harvard Business School.

Levitt developed a basic model that consists of five phases, which he called the product life cycle in its entirety: development phase, introduction phase, growth phase, maturity phase and degeneration phase (decline).

I will go into each of these phases in more detail in a moment, but would first like to explain why the economist found the development of this model useful and helpful.

During his studies, he noticed something that is actually obvious, but had not been shown before: the properties of a product change very strongly during its life cycle.

The overarching product strategy therefore needs to take into account the specific problems and characteristics of each phase.

This applies both to marketing and sales, but also to decision-making in the management area.

When is the right time to invest in the product to increase sales?

And when should you stop investing or switch to another product?

These questions can be answered with the help of a detailed analysis of the product life cycle.

The 5 phases of the product life cycle

So let's take a closer look at the product lifecycle model.

I will now go into the special features of each phase and use case studies to show you how you can achieve your marketing goals.

1. Development phase

The development phase is always a very sensitive phase because the project is still tied to many ideas.

You probably have high expectations, but before you can sell the product to generate sales, you must first improve your product proposal, run numerous tests, validate the hypotheses that have been made, and make any necessary changes.

Startups are familiar with this phase, but it is not limited to just startups.

An automaker wouldn't bring a new car to market without first having a well thought out project and studying the launch and adoption of the new model.

I can show you this with an example. You may have heard of leggings for dogs before. The product was introduced by Walkee Paws at the end of 2018.

We can assume that the introduction was preceded by careful product planning, which led to the shape of the leggings, the material used and the patterns selected.

While the product is not yet being sold in the development phase, it should be marketed.

Just imagine the potential for success of a marketing campaign when Walkee Paws announces the dog lovers dedicated to this novelty.

I could imagine funny posts on social networks that arouse curiosity and encourage engagement.

A press release, posters or interactive campaigns in the pedestrian zone are also conceivable.

The company must take these promotions into account at the development stage.

2. Introductory phase

At Walkee Paws, the main thing for me is the product launch.

The product has gone through all development phases and is considered ready for the market.

In this phase, the product functions are primarily advertised.

Large companies and well-known brands almost always choose television advertising for this.

All you have to do is turn on the TV and you'll be bombarded with advertisements for the latest soft drink, a new motorcycle or a cell phone with groundbreaking new functions.

This is the stage in the product lifecycle where much of the advertising takes place, so it is not uncommon to see negative financial results at this stage, even after sales have started.

Production and distribution costs also have an impact on the bottom line.

In order to reduce costs and minimize damage, it is essential to define a target group that represents the ideal customer for the product.

That way, you can optimize your marketing investment and use the right platforms to get your message across and target the audience you want.

It is advisable to use inbound marketing measures and use relevant content to ensure that the potential customer becomes aware of the company and its offer.

In this phase, potential customers are convinced to buy.

3. Growth phase

When the product life cycle follows its normal course, and when you have a well thought out and carefully implemented strategy, the growth phase begins.

In this phase you can scale the sales and keep the investment in marketing constant.

It is impossible to predict when the growth phase will start, as this depends heavily on the product and the market.

Even with correct planning, this phase can take a while, but it will come sooner or later.

Now you can't let up under any circumstances.

It is imperative to continue investing in marketing and sales.

This applies to both advertising and improvements to the product in order to tailor it to new target groups and markets.

You should also train your sales team.

Many companies fail at this stage and their products go into decline without ever reaching full maturity.

You may still remember the funny TV ad for a beer with this fat actor with a mustache.

This beer brand has long been considered the market leader and the advertising was often commented on, back then in the form of word of mouth.

The product is still sold, the composition of the beer does not seem to have changed, but it has been forgotten due to the strong competition.

This is certainly due to the lower investment in advertising.

What do we learn from it? When your product is in the growth phase, you need a good strategy to keep it there for as long as possible, even if your competitors are trying to win over customers.

4. Maturity phase

The maturity phase is the climax of the product life cycle, and it is also the most profitable phase.

Your product has a steady market share and stable sales.

Although the growth rates are declining, the decline can still be avoided a little with the right strategy.

The challenge is to let the maturity phase last as long as possible in order to generate profits for as long as possible.

It's not that easy at all and here too we can again take the example of the beer brand as an example.

All the well-known brands that come to mind at this point owe their success to investing in the maturity phase.

The Coca-Cola brand, which I will discuss in more detail below, has been around for decades, even though it is “not dependent on marketing”.

The company has understood that brands cannot last forever, that they are subject to market fluctuations and that they are at the mercy of the taste and behavior of the consumer.

What would happen if a competitor suddenly brought out a new soft drink that became the new favorite for barbecues and family celebrations?

Without advertising, Coca-Cola would quickly lose market share and probably even its place as the market leader.

5. Degenerationphase (decline)

It is hard to imagine that Coca-Cola, a company that has existed for over 100 years, will eventually come to an end.

But even Coca-Cola will be forgotten at some point. Maybe not the Coca-Cola company, but the drink.

That could take another 100, 200, maybe even 1000 years. It is impossible to predict.

Every product reaches saturation at some point and then the decline sets in.

The company must recognize this early on and then face the painful truth. Performance metrics usually indicate the decline and the company can prepare to replace the product with a new one.

If everything points to a decline in demand, stop investing in the product to stop the degeneration.

The could work, but what do you do when it doesn't work?

In this case, you could even jeopardize the very existence of the company, not just the product.

You need to follow this process closely.

You need tight controls and strong performance metrics to make the right decisions and avoid making mistakes.

Why it is so important to understand the product lifecycle

You have understood the concept of the product life cycle ’and the main characteristics of all phases.

You have definitely understood why you should apply this concept to your company, but I would like to take a closer look at some questions and advantages.

Here are some of the benefits of the product life cycle:

  • Better and well-informed decision making
  • Marketing investment optimization
  • Qualification of the sales force
  • More control over the results
  • Long-term strategic planning
  • Better organization and process management
  • Long lasting products
  • Better preparation for the competition
  • Market leadership becomes a realizable goal

Is the product life cycle only applicable to products?

This is an interesting question.

If the concept were limited to products only, then very few companies could apply it.

On the one hand, the assumption that the product life cycle is better suited for industrial companies is entirely correct; on the other hand, the concept can be used creatively and adapted.

Take a large company with subsidiaries in different cities as an example.

Each subsidiary can be viewed as a product when applying the concept, you would only have to analyze the performance of each company individually.

Another example would be a company that has many different brands, each with their own product lines.

To illustrate this, we can take a look at the Procter & Gamble website. The company has several brands in different countries.

What stage of the cycle are each of these brands at?

Does the company plan to introduce new brands that are currently in the development phase?

Finally, let's look at an alternative.

Could consumer goods be substituted in the model of services proposed by Theodore Levitt?

This is entirely conceivable, depending on the company's area of ​​activity.

Let's take a company that renovates houses as an example.

The company can offer a variety of construction services, such as: B. laying floors and tiles, painting, interior and exterior insulation, electrical and hydraulic systems, masonry work, to name just a few.

If we were to apply the concept to this example now, we would have to assess the life cycle of each service offered in order to be able to correctly estimate the amount of investment required and the profit margins.

Useful examples

What does the product life cycle look like in practice?

I would like to clarify the concept with two well-known examples: Havaianas and Coca-Cola.

The Havaianas product lifecycle

  • phase of development: The famous flip-flops are inspired by traditional Japanese sandals made of wood or straw. In Brazil, however, rubber was chosen as the material for production because it was assumed that it would find the greatest acceptance among consumers.
  • Introductory phase: The product launch in classes C, D and E was a complete success across all markets.
  • Growth phase: Havaianas were mostly in the growth phase and ultimately dominated over 90% of the market.
  • Maturity phase: However, the maturity phase did not come about until the 1990s with a new product design that appealed to a different target group. The brand owes its success to its investment in marketing, especially the now classic TV spots that are fun and focus on famous actors.
  • decline: There are currently no signs that Havaianas could enter the decline phase.

The Coca Cola product life cycle

  • Phase of development: Very little is known about the development of Coca-Cola and the creation of the mysterious formula.
  • Introductory phase: The brand already seemed to have a well-thought-out project in place in 1886, the year it was launched.
  • Growth phase: The soft drink was already consumed ten years after the product was launched in all states of the USA.
  • Maturity phase: It is impossible to say exactly when the brand reached maturity, but it is safe to say that it has spent most of its life cycle in this phase.
  • decline: Coca-Cola's net operating income appears to have fluctuated since 2012 and is trending downwards. While a small decline can also be expected in the maturity phase, investments in marketing and new products must be continued.

Product life cycle compared to the BCG matrix

A product is created, it grows, demand falls, and the product ultimately disappears from the market.

Isn't that the model of the BCG matrix?

If you noticed, you were paying close attention.

The BCG matrix is ​​a portfolio for the strategic management of companies. It was developed by the Boston Consulting Group and is therefore named after the company.

The BCG matrix is ​​very similar to the product life cycle with small deviations.

The model consists of four, not five, phases: Question Marks, Stars, Cashcows and Poor Dogs.

The names of each phase are based on the characteristics of each phase, not the entire process.

Have I messed you up now? Then let me explain the whole thing briefly.

Take a look at the following graphic:

Question Marks are the newcomers among products with growth potential.

Stars are the most promising products from a company with a high relative market share in a growth market.

Cash cows produce stable, high cash flows, but are in a market that is only slightly growing or static.

Poor dogs are a company's discontinued products. You are no longer making a profit and most likely will not recover.

Question marks and stars make up the bulk of the marketing budget. Cashcows can be "milked" without further investment and poor dogs should be removed from the portfolio.


You learned what a product life cycle is and what characteristics make up each phase of the cycle.

I have given you helpful tips so that you can develop your own strategy for each of these phases.

Use the newly acquired knowledge to guide your products into the maturity phase and keep them there for as long as possible.

In which phase is your product currently? Share your experiences with me in a comment!