I had an opportunity to attend a session on High tech product management at recently concluded Nasscom Product Conclave Meet. Session was phighly useful. I am highlighting one topic from the session which is “Lifecycle of a product”.
The Product Lifecycle Stages:
Development – this is the most costly stage of the cycle as there are no revenues to support development efforts. Losses occur in the short-term, as precious resources are allocated to development efforts.
Introduction – Product is introduced in the market, in this stage losses continue due to high costs and low revenues. There is little or no competition and demand needs to be generated. Customers need to be .sold. on trying the new product.
Growth – Sales effort bring results, costs reduced from economies of scale, sales volume increases significantly, and profits are earned. Competitors begin to develop competing products while prices are at their maximum.
Maturity – costs are relatively low as the need to generate demand has decreased; sales volumes peak, competition starts to heat up. Prices drop based on competitive pricing, mergers & acquisitions occur, and brand & feature differentiation becomes more important.
Decline/Stability - Its that stage where product demand tends to decrease, sales volumes level off or begin to decline as competitors chip away at market share. Prices diminish and production & distribution efficiency become top drivers of profitability.