I was asked during an interview at South Africa’s biggest mobile Telecom companies years back about the Product Life-Cycle. The interview had been going extremely well at that point and one of the line managers asked whether I had an understanding of “the product life-cycle” and I blanked out.
To this day, I could kick myself because I studied the product life-cycle and I was a product manager and ate, slept the practical aspects of it. Eating my humble pie I’m putting down this post for the world so that you hopefully don’t blank out when you get asked this question, ever.
The Product Life-Cycle is usually depicted as a bell-curve (shown above). In the picture, the right-hand side, the decline, of the bell curve is cut short. The product life-cycle explains the introduction through to eventual decline of a product or service.
If you think about it, most products, services, and even companies run this course, at the bleeding edge you have your early adopters picking up the product at the launch or introduction for a premium on the hype of being first adopters and trendsetters. Those are your Launch day and pre-launch eager-beaver types. To those thinking that the early adopter tax doesn’t apply to Kickstarter, Indiegogo, RocketHub and other crowdfunding platforms. The early adopter tax is extreme-risk.
During the initial growth phase marketing, sustainability and mass-market appeal are essential to keep the momentum going. This is where you begin building the scope and scale-out into the channel or partner ecosystems. With the scope and scale, commoditisation of the product occurs with similar, like or replica products, first-mover advantage is lost, and discounting start occurring.
At the apex or top of the curve, you see aggressive deep discounting, seasonal sales and specials to squeeze every last bit out of the product. This is where revitalisation occurs prior to another model launch with some more features, functionality or flavour to regenerate the appeal. If this isn’t done the market loses interest and moves on to something else.
You can see this play out annually with most, if not all, technology product segments. An example everyone would know is Apple iPhones, Samsung Galaxy, and Google Pixel. Evert year a new model is released to reinvigorate the interest and appeal, keep consumers buying the new model, and prevent decline.
There are exceptions to the rule. Companies like Coca Cola, Pepsi, SAB Miller (also now Forster’s), most tobacco companies and Nestle (old school chocolate makers) where the same “trusted” brands run for numerous years even decades without apparent decline. These types of products follow a more company lifecycle as shown below. What they do is re-brand the same product, re-launch in new packaging to revitalise but the product itself, Coke, Pepsi and Beer are the same.
You see this type of life-cycle (above) with companies after they undergo interventions (in the decline phase).
Truly diverse multinational brands experience this type of life-cycle where renewed advertising, innovation or reinvention sparks interest in the product and sales pick up. Some have the added complexity though like SAB/Miller with 150 different brands where advertising one of their brands which competes against another internal brand cannibalises sales.