Objectives of the Product Life Cycle
Product life cycle objectives are crucial, because they provide basic knowledge that can help business owners make profitable decisions about the kind of marketing objective to employ. These objectives help marketers take proactive steps rather than launch reactive measures to deal with market pressures. Products pass through several distinct stages, and the objectives change as products move through each of these phases.
The product life cycle is an integral process in management of any product and revolves around the introduction, growth, maturity and decline stages. For emerging businesses, the cycle concept is an ideal tool that enables marketers to forecast future sales and plan new marketing strategies. The marketer’s marketing objectives depend mostly on where the product is in its life cycle. For example, in the introduction phase, companies focus on introducing their products to the market. In the growth stage, however, they focus on sales and pursue efforts to distinguish their products from those of competitors.
At the introduction stage of the product life cycle, companies often seek to enhance brand awareness as a way of improving the product's position in the market, which involves creating a market for the products. Companies that succeed at this stage often undertake market research to identify suitable markets for their products. They advertise through various media channels, tools and platforms, including social networking websites, video-sharing websites and blogs, all of which can effectively help companies reach the desired target market.
A successful marketing plan can guarantee improvements in the market share. To understand whether there is a real improvement in a product's market share, companies compare the percentage of sales volume to that of the competitors in the same product category. During this growth stage, the focus is mainly on reaching as many customers as possible. To succeed, companies use additional promotional and distribution resources to squeeze enough profits from the stable markets they enjoy. For example, in some cases, a company might lower the price of its products to steer customers away from other manufactures in the same category.
As products move from the growth stage to the maturity phase, the primary motive is improving sales to maximize profits. Even though demand for products at this moment may naturally level off, the companies may spend less on advertising and promotion. This is because when products reach the maturity phase, the company’s brand awareness is already well-established in the marketplace. Instead of focusing on increasing market share, the primary objective at this stage is to maintain the current market share. This objective can be achieved by use of promotional strategies geared toward customer loyalty among the existing users.
At the final stage of a product's life cycle, product sales begin to decline. Companies, therefore, focus on reaping profits for as long as possible. It is at this time, when the product's popularity begins declining, that companies make decisions regarding the ultimate fate of their product. Companies may decide to lower product prices to maintain market share for as long as possible. Other companies may decide to discontinue the product by developing replacement products. Making proper decisions throughout the product's entire life cycle can naturally ensure a long life for the product.