Product life cycle

product life cycleProduct life cycle is a model used in the strategic management through which we can analyze and know the moment in which a product is placed in function on its sales and the time elapsed since its launch to the market, defining and designing the best strategy that allows us to maximize profits, increase sales or acquire a competitive position within the sector.

Any product or service of our business can represent its life cycle in a graph whose vertical axis is sales volume and the horizontal axis is time, through this graphic representation we observe 4 well differentiated stages:


This stage begins when the product has been released to the market and the first sales take place. In this stage, companies usually opt for investment strategies focused on the promotion of the new product through the use of advertising campaigns in the different available media (television, internet, newspapers ...) with the main objective of publicizing the product and achieve a greater volume of sales by acquiring new customers.

This stage is characterized by obtaining zero or little profitability due to the expenses previously disbursed during the design, development and manufacturing phase of the first units as well as their promotion. Likewise, the presence of competitors is usually little or no given that there is a risk that the product does not have the desired reception.

The duration of this stage depends on various factors such as the need for consumers, the degree of novelty or the ability to substitute other products, for example the launch of a product as the elixir of youth and with an affordable price would have a very short phase of introduction given the high degree of acceptance by all consumers and the large volume of sales that this new product would have.


In this stage, the product begins to be known and accepted by consumers, increasing sales. If the product has good prospects new competitors start to appear with the same or similar products taking into account if there are patents, the costs of entry into that business as well as the development and manufacturing costs.

At this point companies generally acquire a cost or differentiation strategy, the former try to win customers by selling the product at low prices, while the latter offer the product with some or several different qualities and which are well appreciated and received by customers, all with the aim of taking a dominant position in the product market by getting as many new customers as possible.


In this phase the product has already been fully accepted and sales are maintained over time, this stage is also characterized by market saturation due to the presence of competitors.

In this phase the companies work deeply in the reduction of costs and in the differentiation of the product, since in the market all the consumers have been distributed among the different brands that offer the product, for this reason the companies focus their efforts adopting strategies of loyalty or acquisition of existing consumers.

The duration of this stage depends on the nature of the product, for example fashion or trend products have a short maturity time while staple products have a long maturity cycle until a new substitute product appears.


In this last stage, the product begins to lose its attractiveness and gradually decreases sales volume in the entire sector.

In this last phase companies can opt for settlement or re-launch strategies, taking into account the origin or the main reason why sales are decreasing, such as the launch of a new substitute product, the presence of a new fashion, negative campaigns towards the product ...

The liquidation strategies go through to get rid of all the products via promotions, discounts ... before the fixed costs of manufacturing surpass the sales entering in negative benefits and therefore in losses.

The relaunch strategies aim to increase sales of the product through functional changes, addition of new features, redesigns, etc …

Duration of the life cycle of a product.

Currently the duration of the life cycle of the products is being shortened continuously due to the following 3 factors:

Technological products such as smartphones, wearables or computers are examples of products whose models have short life cycles.

On the other hand there are products with a long life cycle that are stable in their maturity stage, basic food products such as rice or wheat and other raw materials such as steel or oil are products whose acceptance and use is global, in which the demand varies due to population growth or global economic issues.


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