Creating Value Through Product Strategy
- Imagine launching a new smartphone.
- It’s sleek, packed with features, and hits the market with a splash.
- But what happens next? How do you ensure it stays relevant and profitable over time?
This is where product strategy comes in.
Product Life Cycle (PLC)
Product Life Cycle (PLC)
The Product Life Cycle (PLC) is a framework that outlines the stages a product goes through in the market such as introduction, growth, maturity, and decline.
Each stage requires distinct strategies to maximize success.
1. Introduction
- Characteristics:
- Low sales, high costs, and limited competition.
- Focus on building awareness and encouraging trial.
- Marketing Strategies:
- Promotion: Heavy advertising to create awareness.
- Pricing: Skimming (high prices) for unique products or penetration pricing (low prices) to attract customers.
- Distribution: Limited, focusing on early adopters.
When Tesla launched its first electric car, it focused on high-end markets with premium pricing and extensive media coverage to build brand recognition.
2. Growth
- Characteristics:
- Rapid sales increase, growing market acceptance, and emerging competition.
- Marketing Strategies:
- Product: Improve features based on customer feedback.
- Promotion: Highlight competitive advantages.
- Distribution: Expand to new markets and channels.
Streaming services like Netflix expanded globally during their growth phase, offering localized content to attract diverse audiences.
3. Maturity
- Characteristics:
- Sales peak, market saturation, and intense competition.
- Marketing Strategies:
- Product: Differentiate with updates or variations.
- Pricing: Competitive pricing to maintain market share.
- Promotion: Emphasize brand loyalty and customer retention.
Coca-Cola regularly introduces new flavors and packaging to keep its brand fresh and appealing during its maturity stage.
4. Decline
- Characteristics:
- Falling sales, reduced demand, and market exit threats.
- Marketing Strategies:
- Product: Focus on best-selling variants.
- Pricing: Discount to clear inventory.
- Promotion: Minimal, targeting loyal customers.
DVD players are in decline, with manufacturers offering discounts to clear remaining stock.
Tip- The PLC is a model, not a rule.
- Products can skip stages or experience unique cycles (e.g., seasonal products).
Product Portfolio
Product portfolio
A product portfolio is the collection of products a business offers. Managing this portfolio strategically ensures long-term success.
