Product Life Cycle (Edexcel IGCSE Business)

Revision Note

Written by: Lisa Eades

Reviewed by: Steve Vorster

The product life cycle describes the different stages a product goes through from its conception to its eventual decline in sales
There are typically five stages in the product life cycle: development, introduction, growth, maturity, and decline

The five stages a product goes through over its life span - from initial development to eventual decline

The implications for marketing actions vary at each stage of the product life cycle
Companies should tailor their marketing strategies to each stage to ensure long-term success

Marketing Strategies & the Product Life Cycle

Stage	Explanation	Marketing Strategy
Development	The focus is on designing and developing the product The business usually incurs high costs for research and development, market research, and product testing	Marketing strategy during this stage is focused on creating awareness and generating interest in the product
Introduction	The stage begins when the product is launched Characterised by slow sales growth as the product is still new and unknown to most consumers	Marketing efforts are focused on creating awareness and generating interest in the product
Growth	The product enters this stage when sales begin to increase rapidly The business focus shifts to building market share and increasing production to meet this growing demand	The marketing strategy is to differentiate the product from its competitors and build brand loyalty
Maturity	Characterised by high sales but slowing sales growth Market saturation is likely	The marketing strategy aims to maintain market share and increase profitability by cutting costs and finding new markets
Decline	Starts when sales begin to decline as the product becomes obsolete or is replaced by newer products The business focus shifts to managing the product's decline and reducing costs	The marketing strategy may involve discontinuing the product, reducing prices to clear stock or finding new uses for the product

You do not need to consider cash flow or profitability over the product life cycle.

Extension strategies refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle
These strategies are designed to boost sales and maintain profitability for a product that has reached the late maturity or decline stage of its life cycle
There are two types of extension strategies which are often implemented at the same time
- Product-related extension strategies
- Promotion-related extension strategies

A Comparison of Product and Promotion-related Extension Strategies

Extension Strategy	Explanation	Examples
Product-related	Changing or modifying the product to make it more appealing to customers This could involve improving or adding features, increasing capacity or redesigning its appearance	Product improvements e.g. Samsung releases new versions of its Galaxy Smartphone every year with upgraded features and improvements to the previous model Line extensions e.g. Coca-Cola introduced Diet Coke and Coke Zero as line extensions of its original Coca-Cola Repositioning e.g. when IBM's personal computer division started losing market share to other brands, it repositioned its products as high-end business machines and focused on the enterprise market
Promotion-related	Changing promotional activity related to the product This could involve changes to advertising, different pricing tactics or attractive sales promotions	Changes to advertising e.g Kellogg's continues to recreate adverts for its Corn Flakes cereal which has been around since 1906 Price promotions e.g. Cyber Monday occurs on the first Monday after Thanksgiving in the USA and electronic firms discount prices significantly in order to boost sales of their products Sales promotions e.g. many coffee shops offer a loyalty program where customers can earn a free drink for every six drinks consumed

Last updated: 11 October 2024

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