If you look up the term product life-cycle in many textbooks, you will find a graph which measures sales over time. The graph will show a curve and areas under the curve labelled as distinct stages in the life of the product. Most of these graphs identify the following stages in the life of a product, Introduction, Growth, Maturity, Saturation and Decline.
In the Introduction stage, sales are low and costs are high. Consumers are not aware of the product and it likely that there will be significant costs for promoting the product to both the buying public and to retailers and wholesalers. There are also the costs of developing the product which need to be recouped. At the introduction stage a product is unlikely to be profitable.
The graph then moves into the growth stage. Consumers and retailers are becoming increasingly aware of a product’s availability, demand grows and so do sales. Hopefully, the product begins to make a profit.
The next stage is maturity. Basically, everyone who wants to buy a product has, or is doing so. Most products currently in the marketplace are mature.
Then the market for a product reaches saturation. There are more products on the market than are demanded. This could be because competitors or alternative products are attracting the target consumers of a product.
Eventually the sales in a product decline. This could be for a variety of reasons. A product which meets the needs of consumers may have replaced the original product; fashions and technologies change; or the product simply becomes obsolete.
For many products this graph is a model which generally applies but there are plenty of examples of products which do not meet its neatly segmented categories.
Probably the best example of a product which defies the graph is Lyle’s Golden Syrup. This product has been sold in packaging which, apart from the introduction of a squeezy bottle, has hardly changed in over 150 years. Although the product has had its ups and downs in terms of sales volume, it hardly matches the life-cycle defined in the standard graph.
Then there are the products which could be described as mayflies. Those products which are fast-selling short-lived fads which are the height of fashion one day and unwanted tat the next. The toy market tends to have one of these every year, whether it is loom bands, or cabbage patch kids. These products tend to have life-cycle which is the polar opposite of that of Lyle’s Golden Syrup.
If you are drawing up a marketing plan it is crucial that you consider the potential product life-cycle. If you have an existing product on the market are you aware of its position in its life-cycle and are your marketing mix strategies appropriate?
Take the strategy used by Lyle’s. When they first sold their syrup they advertised widely. Of course there was no television, radio or internet but Lyle’s used tin plate signs at railway stations and outside shops; they advertised on the front page of newspapers (the front page of newspapers in the 19th century was predominantly advertising space); they advertised in women’s periodicals such as Mrs Beeton; and they had a team of sales representatives who visited not just grocers but also the head cooks at institutions and the large country estates of the aristocracy.
Today, Lyles do very little advertising directly to the public. Their promotional activity is concentrated on wholesalers and to retailers rather than to the public. If you go into a supermarket and look for Lyle’s Syrup in the baking aisle you will find it located at eye level, the most prominent buying position in a store and the shelf most in demand by manufacturers (in fact manufacturers often pay the supermarket for this prominent position). Lyle’s marketing has shifted from a strategy aimed at consumers to one which is aimed at their customers, i.e. supermarkets, wholesalers and caterers, as the product has moved through its life-cycle.
Currently home baking is in vogue, partly due to the popularity of programmes such as The Great British Bake Off. Lyle’s may now feel that it is appropriate to promote their products directly to consumers again.
Philmus Consulting can help your business to develop marketing plans and strategies which are appropriate for your product’s life-cycle.