A product life cycle (PLC) describes a product's various stages, from its development and introduction to the market to its decline and removal.

The PLC concept was introduced by Theodore Leavitt in 1965. He introduced five stages to the PLC that are still used today: Development, introduction, growth, maturity, and decline. These stages of PLC are often depicted as a curve to show the gradual climb from development to a peak at maturity and an eventual decline at the end.

Every product has its own PLC that generally follows these five stages. However, the duration of each stage will vary depending on the industry, product type, market conditions, and customer demand.

For example, basic denim jeans have been a popular article of clothing with a long PLC that has endured since the 18th century. But different styles and fits of denim jeans (such as acid wash, stone wash, ripped, boot cut, bell bottom, or skinny) typically have shorter PLCs as they are tied to rapidly changing fashion trends.

Why is the product life cycle theory important?

Understanding a product’s PLC can help you make informed and strategic development, marketing, and resource allocation decisions at every stage. It will help you to know when to develop and introduce new products to replace old ones, improve existing products to meet customer expectations, and adapt to market changes so you can stay competitive.

Who uses the product life cycle?

Several different roles and divisions within a business use the PLC concept to help them successfully release new products and maintain existing ones. This might include:

• Product managers: Product managers use the PLC to determine when to introduce new products and update or release new product versions.

• Marketing: The product life cycle in  marketing is important to develop ad campaigns for each stage, from building awareness to maintaining market share.

• Sales: Sales teams use the PLC to help them understand the market, anticipate changes, and adapt their sales strategies.

• Manufacturing and operations: Understanding the PLC helps manufacturing and operations teams plan how many units to produce and manage inventory based on anticipated demand in the different stages of PLC.

The five stages of the product life cycle curve

Each stage of a PLC represents a different characteristic of a product’s performance in its market.

Development

This is the research stage used to determine whether the product is viable and should be released into the market. The company invests in talent to create prototypes and testing so they can pitch the product’s potential value to investors and other stakeholders. This stage can take a long time depending on its complexity, and it can cost a lot of money because development and prototyping don’t typically generate revenue.

Introduction

In the product life cycle introduction stage, the product has been developed, tested, and built. Now it’s time to introduce it into the market. Sales might be low, especially for a new product, until customers become aware of it. This is a time to invest in marketing and promotions to build awareness and generate demand.

Growth

As awareness grows through effective marketing, good distribution strategies, and positive customer feedback, demand for the product increases. In the growth stage of the product life cycle, you must focus on increasing production to meet the growing demand. As your sales increase, profits offset the investments made during the development and introduction stages.

Maturity

In this stage, the product is well-known and accepted in the market. The product has sold well, but competition from other companies is intense and sales growth has hit a plateau. To maintain or increase your market share, you must develop strategies to differentiate the product from the competition, such as introducing improvements, changing the price, marketing more aggressively, releasing a new version, etc.

Decline

Sales are decreasing because of market saturation, a change in customer preferences, technological advancements in similar products, or the introduction of a new product that appeals to your customers. You may decide to phase out the product or make improvements to make it more appealing. But if it doesn’t look like it can be revitalized, you might need to discontinue the product.

What are the benefits of using the product life cycle theory?

Understanding and using the PLC can provide valuable insights that can guide your decisions throughout a product’s journey in its market. Benefits of using the PLC include: 

• Strategic planning: Understanding which stage your product is in helps you to make better decisions about product development, how to market your product, where to spend money, and so on.

• Resource allocation: The stage your product is in helps you to more effectively allocate resources. For example, during the development and introduction stages, you might allocate more people, money, equipment, and materials to creating and marketing the product.

• Risk management: Understanding the PLC can help you to anticipate and mitigate potential risks associated with different stages of PLC.

• Competitive advantage: The PLC helps you to align effective strategies with each stage so you can be adaptable to changing market conditions and stay ahead of your competitors.

Determining which of the stages of PLC your product is in

The time a product stays in each PLC stage differs for every product. For example, certain cola drinks have been in the maturity stage for decades, while DVD hit its maturity and decline stages approximately 10 years after its peak with the emergence of new technologies like Blu-ray and streaming video.

Determining and understanding which stage your product is in can help you to develop effective strategies to keep your product relevant and extend its life. Here are a few things you can look at to help you determine a product’s current PLC stage.

• Sales trends: How well is your product selling? If you just introduced it, sales might be slow. But you should be able to see an upward sales trend. If sales are increasing rapidly, you’re probably in the growth stage of the product life cycle. When sales slow or decline, you are in the maturity or decline stage.

• Market share: How does your product compare to competitors in the market? In the introduction and growth stages, you should see your product increasing its market share. In the maturity stage, you’ve captured a lot of market share. Maintaining and defending that share is crucial to keep the competition at bay. In the decline stage of the product life cycle, you’ll likely see your product lose market share to newer or more innovative products.

• Customer feedback and satisfaction: Positive feedback and increasing satisfaction can indicate that your product is in the growth or maturity stage. If feedback expresses dissatisfaction or indicates that customers are looking for an alternative, you might be in the decline stage.

• Competition: What does the competitive landscape look like? If there is a lot of competition with similar products, it could indicate that your product is in the maturity stage of the product life cycle. If yours is the only product of its type in the market, there likely isn’t much competition. This could indicate that you are in the growth stage.

What are the limitations of the product life cycle curve?

To be clear, the PLC is a valuable concept for planning and decision-making. But that doesn’t mean it has no limitations or drawbacks. Some of the limitations include:

• Assuming the predictability of a product’s journey: The PLC assumes predictability in a product’s journey. These predictions don’t always hold true because of market disruptions, economic changes, environmental impacts, etc. For example, who could have predicted the COVID pandemic or how it would disrupt various markets?

• Varying durations of the stages of PLC: Because each stage of the PLC varies from product to product, it can be difficult to predict how long a product will last.

• Overlooking external factors: The PLC focuses on each stage of a product’s life. It might overlook external factors such as cultural shifts, global events, regulation changes, etc. These external factors can influence a product’s success or failure.

• Bias toward new products: The PLC might emphasize the development and introduction stages too much. Companies could get too excited about pouring resources into and developing new products at the expense of maintaining and updating existing products.

The PLC is important for helping you to launch and maintain products successfully. But it’s important to understand that each product differs, and not all will follow the same PLC pattern. Some products might be able to review or extend their life through product improvements, versioning, rebranding, or entering new markets.

Visual collaboration tools like Lucidspark can help you and your team as you plan to develop and release products and services into your market. Lucidspark has all the templates and tools you need to collaborate in a virtual environment no matter where team members are located. Create product roadmaps, customer journeys, workflows, flowcharts, Gantt charts, and other resources to help you stay ahead of the competition.