All products or services created or provided by your business have a life cycle. This period runs from the initial idea and development of a product to its withdrawal from the market and beyond.
Depending on the type of product or service you launch, the length of a product's life cycle will vary substantially. For example, a fashionable item may have a life cycle of only a few months, whereas an everyday item may have one lasting years.
Typical stages of product life cycle
A product's life cycle goes through the following main stages:
- development - the product/service is designed and physically created
- introduction - the product/service is launched and marketed to a small group of customers
- growth and maturity - the product/service is marketed to a wider audience and reiterated
- decline - the product/service either comes to its natural end or is re-developed
Each of these stages is associated with changes in the product's marketing position. Different marketing strategies at different stages may help prolong the life cycle of your products. Read more about the product life cycle strategies.
Product life cycle: key areas to consider
When developing a new product or service you should assess the following key points:
- design - how efficient the product is, how it can be produced and how it can be easily manufactured
- materials - how you can use the best or most cost-effective materials to increase profit margins, improve the environmental impact of your product, or reduce financial risk
- manufacture - how to make the manufacturing process more efficient, or reduce costs
- retail - how to optimise costs incurred through packaging or transportation
- use - how you can make the product or service last longer in order to increase customer satisfaction
- end of life - how materials or ideas from your service or product can be recycled
You need to think about how each of these will affect the various areas of your profitability.
If you're considering developing a new product or service, see 7 key advantages of R&D for small business.