The Impact on Buyers
The product life cycle refers to the life of a product from beginning (introduction) through its end or (decline). All products have limited lives although some products have very long lives. Understanding and identifying the stage of a product allows for appropriate marketing decisions; however, technology has impacted the product life cycle, making products move through the cycle ever faster.
To understand the problem of fast moving product life cycles, one needs to understand the cycles stages:
1. Introduction- this is when the product enters the market but makes no profit
2. Growth stage- this is when the product begins to earn profit and begins moving towards its peak
3. Maturity Stage- This is the stage where sales peak
4. Decline stage- the market shrinks until the product is discontinued due to falling profits.
Technology impacts these stages by making the product increasingly time sensitive. For example, a new iPhone may have a short product life but this life can be further shortened if a new competitor phone has more features and costs less. From the point of marketing, the demographics of customers become vital in relation to the product life cycle because, depending on the customer, some may opt to keep a their phone as long as possible where others may desire to have the latest release. Determining the market and target consumer becomes vital in the use of the products life cycle as a marketing decision maker. For example, if Apple’s core customers are early adopters of technology this significantly impacts the product life cycle by making it shorter as these customers will want the latest phones.
The shortening of product life cycles presents both positive and negative consequences for businesses. Extreme pressure is placed on these companies to produce the latest and greatest gadget before the competitor which can lead to other issues such as product defects. Companies are also impacted positively if they are able to produce the novel product that everyone wants but this can also lead to less time to test the product which can cause large losses if failure occurs. Perhaps a more effective approach is to produce innovations for improving existing product and stretching their life cycle while creating new versions.