The term product life cycle is used within the marketing world to determine the different stages that any given product goes through. Each product that is introduced to consumers goes through the same basic cycle. By studying a product's life cycle, marketers can evaluate the effectiveness of a product.
All products begin with the Market Introduction Stage. This stage occurs when a product is first placed on the market. Generally, a product's price is high at this point, and consumer demand for the product is low. After observing sales for a short period of time, marketers may decide to pull a product from the shelves, or work to create a demand for the product.
Products that move to stage two, the Growth Stage, must be developed and marketed. In order to accomplish these tasks, a product's price must be lowered, according to the present state of the economy, and advertising must begin. If a product proves to be popular with consumers, other companies will begin producing similar products. As competition increases, a product's price generally decreases.
The Mature Stage is reached when a product's popularity begins to fade. Due to too many competitors, the original price of a product will become drastically reduced. At this point, market saturation has occurred, and a product is headed for the final stage: Saturation and Decline. As the name of the stage suggests, products that reach this level become increasingly hard for a company to manufacture.
Occasionally, a product may gain a steady consumer following. For example, the household cleaning product Windex® was first introduced by S.C. Johnson & Sons in 1933. To date, this product is still popular, and it remains a staple in many households across North America. Even though Windex® went through a complete product life cycle, it remained a popular consumer choice.
There is some discrepancy as to the validity of the product life cycle theory. Some market analysts argue that not all products fade away, which is the case with Windex®. Others believe that all products, including Windex®, will fade completely at some point. To these people, a product such as this has not completed an entire product life cycle until the product fades from sight.
Either way, by using the product life cycle model, marketers can gain a better understanding of the course that a product goes through. The information collected during a product's life cycle helps manufacturers to capitalize upon an idea, or scrap the concept altogether. Whether or not a product will remain on the market as long as Windex® has is uncertain, though most manufacturers wish for this kind of never-ending cycle.