Assessing Your Current Product/Service Offering: Question 3
Question 3: Do you know what stage in the life cycle your product or service is in?
All products and services follow the product life cycle. The first stage is called the introductory stage. In this stage, the company is trying to build demand and reach out to as many customers as they can and therefore costs are high and sales and profits are low but building slowly. As the introduction stage moves into the growth stage sales and profits increase rapidly. The product or service has now become popular and there is more competition. Marketing efforts are aimed at increasing the product’s market share. Eventually your product or service will hit the maturity stage. In this stage, sales tend to slow signalling the company has achieved market saturation and eventually the company enters the last stage, decline. In this stage, the company will experience a drop in sales and profits, as demand has dropped and competition causes the sales to deteriorate. The amount of time a company spends in each stage is different for every business.
A successful company is constantly examining its product’s life cycle phase looking for ways to build on its previous successes and its growth. One way to extend your time in these stages are to introduce new functions and features. For example, Apple’s iPhone 12 has a better camera, a better screen, new MagSafe technology, longer battery life, and is thinner than its predecessor. One could also add new product or service lines to its existing one thus creating multiple life cycles and spreading the risk. The new product line could work in tandem with the existing one similar to how Apple has created an ecosystem where one’s iPhone, Macbook, and iWatch are all connected.
Another way to extend the product life cycle is by finding new markets for the product or service. This might be serving a new customer market by changing how the product or service is used or it could be reaching outside your local market and expanding to another region in your country or even internationally. An example of this is an Albertan company that had invented a fishing simulator that simulated a fisherman’s experience of catching fish. The original target market for this was hobbyist and trade show booths, as a means of attracting visitors. When the US Veterans Affairs Department saw this, they realised that they could incorporate this into the rehabilitation regime of their veterans, as a means of making the rehabilitation more fun. This led the simulator into a whole new use as a medical device. With the advancements in E-commerce, reaching new markets has never been easier, although just like with your local market, the larger the market the more competition will exist.
If you would like more information or need assistance with extending your product life cycle, please contact The Joyce Group Inc. at email@example.com
Keep an eye out for the next question in this series.