The marketing life cycle primarily refers to marketing strategies that are implemented as a product goes through various stages of life. There are basically five stages of the product life cycle, including the development, introduction, growth, maturity and decline stages. Customers will only be able to purchase products in the latter four stages, because the product has not yet been placed on the market. Nevertheless, marketing, which includes product, pricing, distribution and advertising strategies, will vary throughout the different product life cycle stages.
Development
The development stage occurs when the product idea is conceived and plans are made to start manufacturing it. Research and development costs are usually extremely high during the development stage. This is also the stage where the initial marketing strategy is developed and a company starts paying for advertising. The development stage ends as soon as consumers start seeing the first promotions for a product.
Introduction
The introduction stage is when people start becoming aware of a company's brand and products. Pricing during this stage can be relatively low, if a company wants to garner market share, which is the percentage of sales a company acquires vs. total sales in the industry. However, a company may want to set a high initial price to start recovering some of its product development and advertising costs. Moreover, marketers may still be in the testing stages for the product and, therefore, have a limited distribution.
Growth
Sales usually increase exponentially during the growth stage of the product life cycle, forcing companies to add features, according to the article "The Product Life Cycle" at netmba.com, an online reference site. Distribution also increases during the growth stage as marketers discover more markets for their products. Marketers will usually maintain their higher prices during this stage, unless their strategy is to increase the number of customers. In that case, a company may lower its prices slightly. From a product standpoint, the goal during the growth stage is to build a brand preference.
Maturity
Competition may start cutting into a company's market share during the maturity stage. A company's marketing team may also be trying to differentiate its brand from competitors' during the maturity stage. As with most industries, one company inevitable becomes the value leader, the one that sets its prices lower than others, while others may choose to focus on service or product quality. As the market becomes more saturated, weaker competition may go out of business. Distribution usually peaks during the maturity stage, and prices will likely fall.
Decline
There are several reasons a product eventually reaches the decline stage: Products become obsolete with newer technology, consumer tastes can change over time or a company can fail to adapt its product strategies to the consumer's tastes or needs. Whatever the case, unless a company can find new markets or uses for its products, sales and profits will ultimately start falling during the decline stage. Companies may become more selective with their distribution during the decline stage, dropping wholesalers or retailers that are less profitable. Companies tend to decrease their advertising during this stage as well.
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