What is the life cycle of a product?
The life cycle of a product (CVP) defines the stages that a product goes from its birth to its decline.
The life cycle of a product is a term first coined in 1965 by the American economist Theodore Levitt in his article “Exploiting the life cycle of a product” for the Harvard Business Review.
Knowledge about the life cycle of a service or product is important to be able to identify the stage in which the product is in order to generate the appropriate strategy in order to reintroduce, relaunch or redesign the good or service to perpetuate its income.
In marketing or marketing, Philip Kotler defines the life cycle of a product as the stages that a good or service passes, defined by the profits and losses that are generated.
Stages of the life cycle of a product
The Levitt product life cycle chart presents four stages: introduction, growth, maturity, and decline, with the stage of maturity where the highest returns will be generated.
Types of product life cycles
In management, the aim is to keep the product within the maturity phase for as long as possible. To do this, marketing, advertising and campaign strategies are used to alter the behavior of the cycle. Various types of life cycles are defined that products can have:
- Classic Cycle: As the name implies, it features the classic behavior defined by Levitt.
- Stable maturity cycle: there are no signs of decline.
- Cycle-recycling: classic cycles where small highs and lows are maintained that fluctuate between growth and decline.
- Cycle of increasing sales or decreasing sales: they indicate a trend of profit or loss.
- Residual market cycle: represents the use of what remains of the market at the end of the product life cycle due to the extinction of the market in which it is located.
- Rapid penetration cycle: the product development or introduction stage is reduced, which means a lesser picture of initial investment losses.
- Successive relaunch cycle: it seeks to maintain constant growth with minimal and predictable declines.
Example of a product life cycle
All goods or services have a life cycle and the time of permanence in the different stages depends on the executed marketing plan. A real example of a product’s life cycle is that of the Coca-Cola drink that was introduced to the market in 1886 as a medicinal drink.
In its growth stage, the Coca-Cola product was transformed into a soft drink with a distinctive bottle in 1915, accompanied by a strong advertising campaign that emphasized its flavor.
Coca-Cola reaches its maturity stage with its global marketing. Coca-Cola’s marketing plans have kept the product in its mature stage for more than 100 years by introducing the beverage in cans, advertising campaigns highlighting values such as friendship and joy, and introducing flavors according to specific demographic audiences.
Currently, the Coca-Cola drink, despite the presence of strong competitors, has managed to maintain this trend by avoiding the decline stage using the cycle of successive relaunches to continue being one of the best-selling soft drinks.