AARRR Model
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TAM-SAM-SOM Analysis
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Product Lifecycle Model
Describe the natural path most products follow.
FASTR Framework
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Philip Kotler's 5 Product Levels
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Product Lifecycle Model: Managing Products from Launch to Decline
Describe the natural path most products follow.
Product Lifecycle Model
Quick Introduction of PLM
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The Product Lifecycle Model is a classic framework used in marketing and business to understand how products perform over time.
It was popularized in the 1960s by Raymond Vernon in international trade area initially, then the lifecycle concept was widely adopted in product and brand management because it helps companies make better decisions at each stage of a product’s life.
Overall speaking, the Product Lifecycle Model (PLM) breaks down the natural path most products follow—from launch to growth, maturity, and finally decline.
It provides clear guidance for product, marketing strategies, and financial expectations in each stage. And we will cover these points in this article.
PLM & Marketing Strategy In Each Stage
The Product Lifecycle Model is divided into four stages. Each stage has unique features, goals, and marketing strategies.
Introduction Stage
Features: The product has just entered the market. Brand awareness is low, sales are small, and costs are high due to product development and promotion.
Goal: Attract early adopters and build initial market share.
Marketing Strategy
- Focus on raising awareness and encouraging trial.
- Introduce the product and highlight its value.
- Focus on promotion and education.
Growth Stage
Features: Product awareness rises, sales grow rapidly, profits increase, and competition begins to emerge.
Goal: Expand market share and maximize sales growth.
Marketing Strategy:
- Strengthen branding, expand distribution channels, keep promoting.
- Improve the produc
- Improve product penetration.
Maturity Stage
Features: Sales reach their peak, growth slows down, the market becomes saturated, and profit margins may start to shrink.
Goal: Maintain market share and profits, and extend the product’s lifecycle.
Marketing Strategy
- Focus on product improvements (despite less room to improve), stronger service.
- Companies may face price wars or innovations from competitors, so focus on differentiation, price adjustments.
- Retain loyal customers.
Decline Stage
Features: Sales and profits drop significantly. Market demand shrinks due to technology changes or shifts in consumer preferences.
Goal: Minimize losses and reallocate resources efficiently.
Marketing Strategy
- Cut costs such as marketing and production investment.
- Gradually withdraw from the market, or clear out remaining inventory.
- Find a new use for the product.
Revenue and Profits in Each Stage
Understanding how revenue and profits change in each stage helps business make smarter financial and investment decisions.
Key Insights:
- In the Introduction stage, businesses often spend more than they earn due to development and marketing costs.
- The Growth stage is when both revenue and profit grow fast. This is the best time to invest and capture market share.
- During the Maturity stage, revenue stabilizes, but costs may increase due to competition, leading to profit decline.
- In the Decline stage, sales drop and maintaining profit becomes hard. Many businesses choose to exit.