Product Life Cycle

The Product Life cycle is a fundamental concept for planning, strategy, product development, marketing, and manufacturing.  Product Life Cycle refers here to a category of products like personal computers or workstations, not to the life cycle for an individual product like the Lenovo ThinkPad  Individual products ascend and decline but more insight is gained from looking at the category as a whole.  Vertical axis below is Sales Volume (in arbitrary units).

Product Life Cycle Chart

Market timing

 

Small

 

 

 

Market size

 

Large

 

http://www.stanford.edu/class/ee353/Abstracts1_files/IMG00006.GIF

 

There are five stages and correspondingly five customer types.  Varying customer needs and a basis for competition are linked to each stage.
 

 

Introduction

Early Growth

Late Growth

Maturity

Decline

Customer type

Innovators

Early adopters and opinion leaders

Early Majority

Late majority

Laggards

Customer need

Features

Product capability

Price/performance education and capability

Service/support price and assurance of quality

Cheapest solution

Basis for competition

First to market and real benefit

Capability

Price/performance education on how to use

Price and unique fit to their needs (segmentation)

Market share gains

Number of competitors

Few/none

Some but little contention due to expanding market

Several competing head to head

Many players Competition kills some off and consolidation begins

Poor profitability so only the largest survive

Profitability

Uncertain

High

Declining

Declining

Minimal

Risks

High

Lower

Higher

Higher

Highest