The sales of most products will decline at some stage. This can be due to factors such as technological advances, trends, innovation or changing consumer tastes.
You will know when your product reaches the decline stage of its life cycle because you will notice a significant downturn in the revenue it generates.
Product decline strategies
At this stage, you should consider:
- maintaining the product in the hope that your other competitors will withdraw their versions before you, which may create an increase in demand again
- reducing your costs and finding another use for the product - entering into another niche area could increase profits
- reducing marketing support, 'harvesting' the product, coasting along until profits dry up and then discontinuing the product
- discontinuing the product when your profit disappears, or when you unveil a successor product
Extending the lifespan of your product
Some of these methods can form an 'extension strategy' that prolongs the life of your current product or service. Such a strategy can temporarily delay the decline and give you enough time to improve or amend your existing product or develop a new one. Read more about product life cycle strategies.
By understanding the product life cycle of all of your products and services, you can ensure that at least one of your ventures is at growth or maturity stage, while another is in decline. By doing this you can guarantee a regular source of profit for all of your products.
Read more about the growth and maturity stage of a product life cycle.