Marketing mix
In connection with the five phases of the product life cycle, the term marketing mix is sometimes used . This means that the more targeted the marketing, the more effective the individual measures can be. The marketing mix is therefore an important tool for successful campaigns. The market situation and the product life cycle of the advertised product are taken into account. Within the marketing mix, all marketing areas are covered and bundled in a targeted manner. The four pillars of the marketing mix are therefore product policy, price policy, distribution policy and communication policy, ie “product”, “price”, “place” and “promotion”.
Phase 2 – growth
As soon as a product makes a profit, sales figures and sales increase, the growth phase begins . Ideally, sales will then grow continuously, which can be seen from a clear upward curve . This phase shows how successful a product really is and whether it is competitive on the market. During this time, more and more customers buy the product and the target group is expanded. The product can also assert itself in comparison to the competition and clearly stand out from the previous model. How strong the growth really is depends on the technical lifetime, but also on the growth in new customers and the possibilities with which the product can be expanded.
In general, other competitors enter the market during this phase in order to offer comparable products. In this way, sales on the market are split, but for the company this can lead to even more reach. If the growth rates decrease ( calculate the growth rate ), the growth phase also ends, although this does not necessarily mean a decline in sales and turnover figures. If the numbers reach their marginal sales, i.e. the product has reached its maturity, the second phase ends.
Phase 3 – maturity
According to gradinmath, there is also a so-called maximum capacity on the market. This point is reached when hardly any new customers can be won at this time . This is therefore a transition phase between maturity and saturation of the market . How can the product life cycle be extended?
A company should react at this point and counteract the downward curve by means of suitable marketing strategies (marketing mix). Sales must also be realigned at this point. This will not stop the cycle, but it will prevent the company from losing market share. At this point the company enters into direct competition and tries to “take away” customers from other providers. If, despite suitable measures, no further increases in sales are recorded, the market is saturated.
Phase 4 – saturation
During this phase , sales and turnover figures stagnate and providers have to counteract these losses. Usually this is achieved by lowering production costs and lower sales prices for the products. In this way, too, companies gain valuable market shares. Pay attention to the corresponding price-sales limit. Once this has been achieved, it is no longer worthwhile for the company to offer this product at all. The product leaves the market. For example, nobody would buy an iPhone 2G these days, which is why it has since been taken off the market.
Of course, companies are trying to extend the saturation phase in order to remain attractive and up-to-date in the market. Now companies can improve their products and try to outperform competing products with those improvements. We know these products as relaunch or facelift models. For example, new functions are built in or the design is modernized. This was clearly evident in the case of Apple, when the design of the iPhone 4 suddenly differed greatly from the two previous models and brought about a number of new functions. In this way, a product can remain in the saturation phase for several years.
Stage 5 – Expiration
In the last phase of the product life cycle phases, despite all marketing and relaunch measures, a decline in sales and turnover figures is observed. The competition for this product has become too great because the competition offers more attractive models. From the customer’s point of view, this phase is an outdated product that people no longer like to buy. In general, however, companies are already working on a successor model after a product has been introduced. This means that the old product is quickly replaced by a new one. Shortly after the expiry phase, the providers bring a successor product onto the market that has been developed with a view to the future. Of course, at this point a company can also decide to completely exit the market.
Factors influencing the phases of the product life cycle
Of course, how long a phase in the product life cycle lasts depends on the respective industry and the product itself. Various influencing factors play a role, which can be influenced individually:
- Price, type of product, special properties, characteristics and technical functions
- Requirements and expectations of customers for a product, as well as the extent of potential customers and target groups
- Measures of sales and marketing, as well as the right time of implementation
- Economic framework, legal factors, political influence and current trends
- Competition and competition, as well as comparable products on the market
