Whether your business sells new pharmaceuticals or state-of-the-art prosthetic limbs, fizzy drinks or customer relationship software, the constantly evolving nature of consumer trends and tastes, as well as ever-developing technological advances, mean that you have to be more innovative and creative than ever before when it comes to extending a product’s life cycle.
Understanding the various stages that a product typically goes through and putting strategies in place to increase their longevity is a key part of brand management. However, this is not always as easy as it sounds. To help you out, we’ve put together this handy guide which explores each aspect of the product life cycle, and looks specifically at how businesses can extend these cycles to increase sales and improve bottom lines.
An example of a typical product life cycle
As we discussed in detail in our recent blog ‘What happens if the product life cycle is not monitored?’, a product life cycle is the process each product goes through, starting from its original launch, through its initial sales period and decline, and ending when it is eventually removed or phased out of circulation. Although not all products go through this exact process, the vast majority of new products launched in any industry will almost certainly follow a similar cycle. How long each stage lasts, however, depends on the popularity of the product as well as the strategies a business puts in place to actively prolong the life cycle of the item in question.
In order to determine the best methods of extending a product’s cycle, it is important to understand the individual phrases a product goes through during its life. Using the example of a new, state-of-the-art prosthetic limb, developed and launched by a healthcare company, we can see how the product’s life cycle may play out without any extension strategies put in place:
After years of research and development, as well as money spent marketing and officially launching the product, the new high-tech prosthetic limb is made available for healthcare organisations and private consumers to purchase.
As sales of the revolutionary prosthetic limb take off, other brands may release similar products in an attempt to seize a proportion of the market. This means a more aggressive marketing approach might be needed to remain the market leader.
At this stage, the majority of healthcare providers/private individuals that would be interested in purchasing the new prosthetic limb will probably already have done so, or decided against it. This means sales will likely level out, drop or even stop altogether. This is usually due to the market becoming saturated.
In this final stage, the sales of the prosthetic limb have significantly dropped. This stage would typically be triggered by a new, improved prosthetic limb product entering the market, making the business’ older model obsolete, or a very similar product at a much lower, more competitive price. At this stage, the business must decide whether it is time to remove the product from the market all together.
How can the product life cycle be extended?
Although it is certainly safe to assume that the vast majority of newly launched products have a similar life cycle and are destined to go through the same four stages, albeit at different paces, there are ways businesses can intervene and slow the decline of a product, as well as preventing it from becoming obsolete. In order to extend the life cycle of a product, there are a number of strategies businesses can put in place. These simple-to-implement actions and approaches can increase the longevity of a product’s life cycle and drive up sales and profits. Read on to find out more.
How can a business expand its product life cycle?
The product life cycle is flexible, and will be slightly different for every product. This is why each stage should be closely monitored. Only by doing this, continuously innovating and keeping an eye on market developments and trends, will you be able to expand and extend your product’s longevity. Here are the three primary ways your business can look to extend its product life cycle.
– Innovate and add new features
Products reach maturity and then gradually start to decline once the market becomes saturated. For this reason, one way to extend the life cycle of a product is to constantly look for ways to improve, switch up and even differentiate your product from copycat products that have entered the market. This could involve launching an updated version of the product with additional features that meet the constantly changing needs of the consumer or releasing optional extras that are compatible with the original product, revitalising demand.
Examples of this strategy working successfully include the addition of Instagram Stories to Instagram and the annual generational update of Apple’s iPhone. If we take our example of the new prosthetic limb, efforts should be made to improve the product further, perhaps by adding new comfort features, using lighter/stronger materials or even simply launching the product in a range of new colours as a method of keeping the product fresh. This strategy should involve user feedback and the strategy should be put into motion during the first growth/maturity phases of the initial product. This way, you are ready to immediately announce/launch the new features as soon as saturation and decline hits.
– Use bold marketing/advertising campaigns
Regardless of which phase your product is currently in, a creative and properly implemented advertising campaign can work wonders in rejuvenating your product’s image, driving up sales in the process. Although costly, TV adverts, internet/social media campaigns and promotional tools such as sampling to reach consumers can introduce your product to a new generation of potential customers, as well as reminding existing customers why they liked your product so much.
Although typically implemented during the introduction and growth phases of a product’s life cycle, this strategy can also be used during periods of decline to really extend its longevity. For example, Old Spice’s 2010 “The Man Your Man Could Smell Like” ad campaign is credited with radically changing the fortunes not only of a product in decline, but also of the entire brand. Similarly, Nike’s original 1988 “Just Do It” campaign not only boosted sales of their flagship sneakers, but also ended up transforming the entire brand from a successful US-based sportswear brand into one of the world’s largest global companies.
To extend the life cycle of our prosthetic limb product, targeted ad campaigns on TV and social media, perhaps using the endorsements of famous paralympians who could use the product, could be a good idea, for example. Free sample products could also be sent to hospitals and physiotherapy clinics where healthcare professionals could show and demonstrate the product directly to potential users. These strategies should be implemented during all four stages of the product’s life cycle.
– Identifying new markets
Finally, Identifying new markets for your product is another great way to potentially extend its life cycle. Perhaps the market you are currently operating in has become saturated or an unexpected economic downturn has impacted on sales? Expanding by launching your product in different countries, for example, can be a great way of boosting sales and reversing through stages of the cycle. Globalisation has made this much easier in the 21st century, and the internet has made reaching all four corners of the globe simple.
As well as looking at new global markets, identifying new markets through diversification is also a good idea. For example, if we take our prosthetic limb product, as well as selling a product that makes everyday life easier for amputees, slightly tweaking the product and innovating in order to make a version of the product also fit for amputees who wish to compete in athletic events opens a completely new market and allows your brand to diversify. Having the ability to unlock these new revenue opportunities can not only extend the life of a product, but also give your entire brand an edge over your competition and better protect your business against unforeseen specific market changes.