Strategic Planning: The Cycle of (Product) Life
From a strategic perspective, looking at where your product or service is in its life cycle helps determine actions in each of the Four Ps (product, price, promotion, and place) related to your target customer.
The following are the four product life cycle phases:
Introduction: This phase provides a period of slow growth with nonexistent profits (because of the extensive promotional costs). Examples include third-generation mobile phones, e-conferencing, and iris-based personal identity cards.
Growth: Growth is a period of rapid market acceptance and developing profits. Some examples of growth are MP3 players, e-mail, breathable synthetic fabrics, and smart cards.
Maturity: This phase is a period of slow growth, level profits, and increasing marketing expenditures to defend the product’s position against competitors. Examples of maturity include personal computers, faxes, cotton T-shirts, and credit cards.
Decline: Decline is a period of falling sales and profits. Examples include handwritten letters, checkbooks, and CD players.
The figure provides an example to help you develop actions for each of the Four Ps, depending on where your product is in the product life cycle. For each target customer group, follow these steps:
Determine your marketing goal for the target customer group.
Determine what phase of the product life cycle your product or service is in.
Develop an action plan that addresses product, price, promotion, and distribution.
You may not need to take a specific action for each of the Four Ps. But write down what’s happening so you can ensure the marketing mix works cohesively.