If you are a business owner or manager, you understand the basics of your responsibility to help grow and administrate your business. One area you may not understand completely is how to manage your products through their lifespan. If you sell tangible products you need to understand their life cycle and how to implement product lifecycle management solutions to maximize profit potential. Here is how product lifecycle management works.
What It Is
The simplest definition of a product lifecycle is that it is the trajectory of a product starting from the initial concept all the way through to discontinuation.
Product lifecycle management entails monitoring a product’s performance and adapting that product to get optimum results for as long as possible. There are several tools that can help the management of the product lifecycle, including supply chain management software, production management software and contact management databases. Each of these help managers know exactly where a product is in its lifecycle and how it is performing under current market conditions as well as how to implement product lifecycle management solutions to prolong its viability.
Every product’s lifespan is comprised of a lifecycle that goes through four principal phases. There are no time constraints to each phase. Some can last for decades (Kleenex tissues for example) or some can have a significantly shorter lifespan (New Coke.)
The first phase is the development stage and includes conceiving of the idea for a product, developing that idea into a tangible product, developing a marketing strategy and moving that product to market.
If the product is viable and desired it will then enter a growth phase. During this phase sales rapidly increase, and customers will generally be happy with the quality of the product and the price. During this phase, the marketing and sales strategies that a business employs are critical to the product success.
Phase 3 is the maturity stage. In this stage, a successful product will start to experience reduced sales. The owner of a product has a few options.
They can move the product towards discontinuation. They can implement product lifecycle management solutions and attempt to modify the product to gain new interest in it. They can modify the product and add new features, in essence creating a new product. They can start to emphasize a discount pricing strategy, that moves the product towards discontinuation but creates a demand among customers because finding the product becomes much more difficult.
The final stage is decline. Virtually every product eventually hits this point. Demand tails off and most attempts to repackage and market the product start to experience diminishing returns. At that point the business has a choice: Attempt to revitalize the product or discontinue it.
Understanding the trajectory of the lifespan of a product makes it easier to identify and implement product lifecycle management solutions. Not understanding product lifecycle management creates a risk of sticking too long with the product until it is no longer viable and starts to lose money.