Product life cycle | Example of life cycle

The product life cycle is made up of the different stages of the product from its creation to the decline. The duration of the stages of a product's life cycle are determined by the innovativeness of the team of inventors and prototype company, as well as by the product's market acceptance. Proper forecasting of the product life cycle allows its founders to optimize the level of investment in each of the processes or stages that make it up.

What are the stages of the product life cycle?

The product life cycle consists of 5 key stages: Product development, Product introduction, Product growth, Product maturity, and product decline in the market.

Stage 1 - Product Development | Product Life Cycle

Stage 1 of the product life cycle refers to the process of creating an innovative product. The product creation cycle is divided into two main moments: the research process and the stage of manufacturing the functional prototype.

The research stage allows for laboratory tests aimed at determining the technical feasibility of the product as well as its economic viability in the future. 

The research stage is often seen as a superfluous expense by inventors; however, proceeding directly with the manufacturing of a prototype, in many examples, is often a serious mistake, as learning and optimizing while manufacturing a prototype is often much more expensive than assuming the necessary iterations in digital environments through a study or basic engineering project.

Stage 2 Product Introduction | Product Life Cycle

Stage 2 of the product life cycle refers to the first encounter between the product and the market. In most examples of innovative products, the introduction stage represents a great learning opportunity, as it yields a list of necessary changes or adjustments in the market that impact its commercial acceptance.

Despite many inventors deciding to move directly from the prototype to mass production of a product. According to our experience, this process should be delayed even further. Industrializing a product is an expensive and energy-intensive process. Additionally, transforming an industrialized product involves a very significant over-investment. At Let´s Prototype, we recommend that the second stage of the product life cycle be done with pre-production units. These are units that exactly replicate the prototype, but are manufactured using cheap, artisanal methods that allow for agile transformation.

The introduction stage of the product life cycle should be seen as part of the product research and development process. Its goal should be to learn from the user or potential customer experience and not to make money from the sale of the products.

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Stage 3 Product Growth | Product Life Cycle

The third stage of the product life cycle refers to the distribution or market introduction process of an innovative product. The main challenges of this stage of the product life cycle include finding strategic sales and distribution channels, as well as strategic alliances to maximize sales opportunities.

In this stage of the product life cycle, you should already move from a prototype or pre-series of functional prototypes to an industrial product. Therefore, the goal is to maximize sales and exposure opportunities for the new invention. It is in this stage that inventors can open up the sale of patents or licensing of patents. This is an exploratory process, where leading companies selling similar products in the market are identified, to whom the opportunity to exclusively exploit the new patented product, developed and tested in the market, is offered. Trying to sell or commercialize a patent in earlier stages could frustrate the development of the product life cycle and it is very unlikely to achieve good economic results to profit from the patent.

Stage 4 Product Maturity | Product Life Cycle

The fourth stage of the product life cycle refers to its sweetest moment in terms of business. If the previous stages of the product life cycle have been efficiently developed, this period is where the most economic profitability can be extracted from the commercial exploitation of the product.

The main objective of this stage of the product life cycle is to maximize its duration. For this, investments and marketing strategies aimed at selling the product are fundamental. It is a costly and time-consuming stage, for this reason, for those inventors who do not exclusively dedicate themselves to commercially exploiting the innovative product, it will be essential to find commercial channels that can maximize the economic return of the invention.

Most inventors who reach this stage of the product life cycle tend to think that this process is eternal. Nothing could be further from the truth; the duration of this stage of the product life cycle will be conditioned by the size of the strategic allies and commercial channels, but above all, by the reaction of the competition creating alternative products that compete as a solution to the problems you intend to solve in society.

Even with patents and having achieved an innovative product, you must be aware that all products that reach this stage of the product life cycle will be copied, transformed, and commercially exploited through alternative means. It is crucial to seek advice from business experts and to closely monitor the reactions of your main competitors.

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Stage 5 Product Decline | Product Life Cycle

The fifth stage of the product life cycle refers to the process of decline or commercial loss of a product in the market. The decline of a product in its life cycle can be caused by market saturation, meaning you have reached the maximum potential customers in your target market, or because competitors have found alternatives to the product that offer better prices or functionalities than your proposal.

In this stage of the product life cycle, it is essential to find allies that allow for territorial expansion at a commercial level. To take your product to other markets, you will need to comply with regulations and consider the existence of competitors in the new markets where you intend to sell. If the decline of the product is caused by the reaction of competitors, you will need to go back to the beginning of the product life cycle, opening innovation processes that allow you to add new functionalities or optimize the design of the product to make it more competitive in the manufacturing process.

Product Life Cycle Analysis 

 

Development

Introduction

Growth

Maturity

Decline

Objectives

Identifying initiatives that the market truly needs.

Learning from user experience

Finding commercial channels or selling the patent

Maximizing commercial opportunities and investing in brand positioning.

Detecting decline early and analyzing the causes

 

Manufacturing functional prototypes

Manufacturing non-industrial pre-series units

Industrializing the product

Optimizing the product manufacturing prices.

Opening the innovation cycle to perfect the product.

 

Demonstrating the economic viability of the product

Implementing improvements based on customer feedback

Investing in marketing and analyzing new markets

Continuously analyzing competitors' reactions

Conducting commercial tests of the new versions in other markets. 

There are different methods for analyzing the product life cycle, among the most common is the BCG matrix (Boston Consulting Group). It is a mathematical scheme that compares the economic results and sales volume of your product with the dimensions of the target market you are aiming for.

The best method for analyzing the product life cycle is one that provides information immediately, as the speed at which the arrival at each stage of the product life cycle is detected conditions the potential success of the new product in the market.

The main advice for inventors regarding the analysis of a product's life cycle is not to be alarmed by the arrival of product decline in the market. It is a natural life cycle that requires preparation and strategic planning. If you have managed to bring the product to the maturity stage in the life cycle, it is very likely that you can recover the product's evolution by restarting the product life cycle process, i.e., by opening stages of continuous innovation, where you must improve the functional proposal but also the economic balance of the product.

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Examples of product life cycles.

If we delve into the analysis of the life cycle of any product known in the market, we can identify the appearance of each of the stages that make up the product life cycle.

The key to a product's success is related to its responsiveness and early identification of product decline. It is essential in this process not to lose focus, understanding focus as the value proposition, i.e., the basis of the real problems that are solved through the use of the product. In the following examples of product life cycles, it can be seen how companies like Montblanc and Gillette evolve their product offerings without giving up their core value proposition.

We can cite multiple examples:

Example of product life cycle | Gillette

Gillette's products are distinguished by the quality and excellence they offer for the shaving and personal hygiene process in general. Since the launch of their famous Mach3 razor, they have been hugely successful in the market. However, precisely because of the high prices that come with achieving such a level of excellence with their products, there are many competitors trying to introduce alternative solutions to the market. These range from the use of disposable razors to products very similar to their models, consisting of razors with interchangeable handles.

The first decade of the 2000s was undoubtedly the maturity phase within the Mach3 razor product life cycle. They achieved an absolute boom of their products worldwide with a marketing campaign that began in 1999. However, in the second half of that decade, the leading razor brands and other competitors in the personal hygiene sector reacted by bringing disposable products and razors with interchangeable handles to the market, which were much cheaper and of medium quality.

Faced with this market reaction, Gillette could have decided to give up some of the excellence of its products to enter into a price battle with its main competitors. Perhaps it would have been a big mistake. Their focus or key value proposition is precisely excellence. Therefore, far from reacting with a price reduction and consequent relinquishment of their excellence, what they have done is not to fail their customers, expanding their range of products with new, more expensive but also more perfect products if possible. In addition, they expanded their product range with deodorants, gels, and other products that in no way intend to compete on price, but rather stand out for their excellence. This clear and confident reaction to their main proposition "quality and excellence" has allowed Gillette to strengthen its brand as a market leader.

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Example of product life cycle | Montblanc

In the early 1906, a German company in Hamburg began selling a model of high-quality fountain pens on the market, made with very expensive materials and at astronomical prices. Initially, their focus was on catering to high-income level customers. 

In general, the European market did not foresee much success for this brand, as its unattainable prices kept it from becoming the most popular and best-selling fountain pen on the market. 

The vision of Montblanc's founders was not to become the best-selling pen, but the one of the highest quality. Their vision was more about marketing an accessory that conveys status and social positioning to their customers rather than ease of writing.

The first years of Montblanc's product life cycle allowed them to reach a state of absolute maturity. They managed to showcase and sell their products in the most renowned luxury goods retail channels in Europe, which also provided them with a great showcase to the world. Montblanc's first perfect decision was precisely, in the maturity stage of their product life cycle, to exclusively choose the sales channels, places where the public attended knowing that they would face astronomical prices for the best pens and accessories on the market.

Like any product life cycle, the decline stage arrived for Montblanc's products. They managed to sell their products to potential customers willing to pay very high prices for their fountain pens. However, they found themselves in a situation of stagnating sales, precisely because they were targeting a very limited market. At that moment, they made the worst mistake in their history: they tried to bring to the market a new model of Montblanc pens, of lower quality but at very affordable prices. With this strategy, they aimed to expand the market dimension, reaching the general public with their renowned brand.

Far from solving the decline of their products with this strategy, the customers who had already been loyal to their high-end products stopped seeing the brand as a social status symbol, as anyone could access their new models with the same brand. For this reason, even Montblanc product collectors decided to devalue their collections.

Montblanc's main mistake in addressing the decline stage it experienced in the 1950s was abandoning its value proposition of “highest quality products that convey a social status difference” to aim for a product with good economic margin but accessible to the general public. This decision had to be immediately reversed, as they lost their loyal customers and, moreover, the general public also did not see an opportunity to access a Montblanc pen, as the aspirational character of the brand had been lost.

In response to this mistake, Montblanc decided to withdraw its products from the market and recovered its initial value proposition, which had allowed it to retain customers willing to pay high prices for its products. Additionally, as part of its response, the company decided to restart the product life cycle, this time with new proposals: sunglasses, executive briefcases, travel bags, and other accessories that, as a common denominator, respond to the same value proposition, conveying social status and differentiation through its brand. 

If you need strategic planning to address the different stages of the life cycle of your new products, you can count on our team of business development experts. They can accompany you from the creation of the product and manufacturing of the first prototypes to the definition of the marketing strategy to sell your new products in the market. 

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