Product Lifecycle Part 2 of 4
All successful products go through a Product Lifecycle, which is to say they pass through the following stages:
- Development
- Introduction
- Growth
- Maturity
- Decline
We often depict this lifecycle along a bell-shaped curve to demonstrate the trajectory that most products take, which looks like as below:
It’s important to know this lifecycle because of the role of Product Marketing Manager and the goals in product marketing change depending on which phase the product is in.
Development: Effort to create the product and prepare it for release into the market. From there, we launch the product into the market
Introduction: Generate awareness, build brand identity, and achieve market penetration
Growth: Increase consumer adoption and build brand preference and market share
Maturity: Maintain market share, defend itself from the competition, building a reputation, and find opportunities to increase revenue.
Decline: Loses desirability and companies must decide to improve it with new features, discontinue it, or pivot
Understanding the lifecycle stage the product is in, is important, but knowing what’s ahead is just as important.
Having a short-term view or tunnel vision on a particular phase may lead to making decisions that hurt the next stage of the lifecycle. It’s early in the process to do a full assessment, but take 15 to 20 minutes and evaluate what stage you think the product is in. If you’re not actively involved with a product, pick a product that you’ve recently started using and work through the same exercise.
Development Phase
No amount of marketing or advertising can make up for a substandard product. Skimp on the development phase and you’ll find yourself struggling in future stages of the product lifecycle.
In the development stage, you’re still figuring out what it is you’re building. It might be an entirely new product, a major improvement, or a new feature. During this phase, the focus is to figure out what the market wants. It's here that you’re researching the competition, understanding the users, and determining what your product must have in order to be successful at launch. You want to do everything you can to get the product right. You must have sufficient features to satisfy your innovators and your early adopters. You can’t satisfy the entire market at launch, so narrow your approach to resonate with this consumer group.
Consider Amazon’s attempt at entering the mobile phone market. In 2014, Amazon launched the Amazon Fire phone. The marketing was everywhere. They clearly invested impressive capital to drive awareness on their new device, but the market didn’t respond well to the product at all. The entire product was scrapped less than 13 months after launch. Even huge marketing budgets can’t overcome a product that misses the mark.
So here are the steps that you want to take during the development stage:
First, embed yourself in the product development process. Product marketing must work hand in hand with product development throughout this first stage unless the product is too tech-focused. Find ways to be part of the process, if the product team has daily standup sessions, start attending them, ask questions. Attend every planning meeting and get access to the planning software that’s being used.
Next, take ownership of researching the target market. Its really important that you understand who you’re targeting, what you’re building, and how your messaging it is going to depend on who will ultimately be buying this product.
Now be sure you know the answers to these key questions:
-Who is the target market?
-Who is the decision-maker in the purchasing process?
-What is the awareness of the existing products available on the market?
-Are customers satisfied with the products available?
Then, demonstrate how your audience will perceive the new product. There’s no reason to launch into the unknown. Start describing how you think your audience will perceive this new product. Include a summary of their needs. Why their needs aren’t being met and how you plan to meet those needs. You can do this by releasing a beta, conducting a digital survey, or setting up interviews with existing customers or consumers in your target market.
And finally, understand the product completely. Go beyond just the features, know what it will cost to produce, what the risks are in development, and how much it will cost to maintain. You also want to know what happens if consumers are unhappy and what features are going to come later and so on. Even if you’re jumping into product marketing well after development, still go through this exercise as if you’re about to launch, it will reveal important details about your product.
Introduction phase
When your product is first brought to the market, it’s in the introduction stage. You’ve decided what to build, you’ve built it, and now it’s available to the consumer. But during this stage, demand is not yet proven. You’re working to validate that what you built resonates with the early adopters in your target market.
In the introduction phase, sales are likely to be minimal and growth is fairly flat. It’s tempting to put the gas pedal down and start ramping up your marketing efforts. Instead, you wanna start the introduction phase by focusing on testing. Once you’ve determined that customers are responding favorably, you push forward with your marketing to generate awareness and grab a foothold in the market.
Now during this phase, you can get away with higher prices, more selective placements, and very personalized promotions. Your immediate goal is the evaluate the consumer response.
So be sure you can answer these three questions:
First, what is the consumer reaction to the product?
Are they responding favorably to the initial exposure?
Are there specific features or attributes they like or dislike?
Are there specific elements they prefer against the competition?
Second, what are the consumer concerns about the product?
Third, what are the consumer’s unmet or unstated needs?
You can conduct surveys, review your customer support interactions, or listen to conversations happening on social media to gather this data. Once you know the market response, you can decide to go back, and fine-tune the product, or press on. Once you press on, your goals will change to generating awareness and establishing a foothold in the market.
Now the introduction phase had a misleading name. Introductions are usually fairly quick. But in the product life cycle, this can take a while. So work to constantly improve your messaging, adjust your value propositions, and keep the feedback loop open with your customers, so you can fine-tune your marketing and unlock the next stage.
Growth Phase
When the product has generated awareness and it has increased consumer demand, you’re moving into the growth phase. Throughout this phase, you’ll be deploying various marketing strategies to significantly increase your growth curve. The focus is to get consumers to prefer your brand over other options. This will require differentiating your marketing strategy and testing new approaches. How quickly you move from the introduction stage to the growth stage, and how rapidly sales increase, will vary. But you’ll recognize a few key attributes of this stage.
First, you’ll begin to see an increase in competition. When the demand for your product starts to increase, other companies will look to enter the market. You’ll need to begin to adjust your marketing strategies so that you can defend yourself from the new market entrants.
Secondly, you can expect the size of the market to increase, which increases the demand for the product and ultimately leads to a sharp increase in sales.
And lastly, you’ll start to see increased profits.
Typically, you’ve figured out how to reduce your costs by this stage, marketing and the business as a whole tends to be more efficient.
Take Tesla, for example, they started by producing an expensive all-electric sports car aimed at innovators or early adopters. They learned about the process, the business, and the market. Then, they moved on to more mainstream but still high-priced vehicles with their sedan and an SUV. The cost kept their market size small, but this was their introduction phase. They tested the market, evaluated the response, and generated a ton of brand awareness in the process. From there, they launched an affordable sedan aimed at a much larger market, and it’s there that growth really took off. Now many other car companies are developing fully electric vehicles.
This increase in competition helps demonstrate that Tesla is now in that growth stage. So what are your goals for product marketing during growth? Well, first evaluate existing value propositions. You must understand that as the market expands, perceptions shift. Reevaluate the value propositions and your key differentiators. Verify the messaging is resonating with this new audience. You may need to work to improve product quality or add new features, or even support services to increase that market share.
Next, listen intently. Launch customer interviews again, and dig deeper into why new customers are coming on board. Sit down and review customer service records to understand pain points. Work with the sales team to determine where they have friction in their sales process, and listen in on other consumers to evaluate new market segments to enter.
Third, strategize. Now is when all the common marketing tactics come out. Visit opportunities in content marketing, digital, PR, trade shows, and so on. Look to increase your distribution channels and start shifting your marketing messages from product awareness to product preference. You’ve departed from your go-to-market strategy and you’re now deploying a wide array of marketing and advertising efforts.
And finally, measure. Measure the metrics that matter. Understand what your business goals are and which metrics demonstrate your success. A robust analysis will help you readjust your marketing strategies. Throughout your growth phase, I encourage you to explore and practice the benefits of Agile marketing.
Maturity Phase
Eventually, demand levels off, your sales peak, and growth become a lot less aggressive. It’s here that the market is nearly saturated. At this point, a product has reached the maturity stage. Your focus now is to defend your turf and prolong your product lifecycle. You’re working to maintain brand preference while at the same time, trying to keep your price competitive so it maintains profitability.
You’re also going to be making finer and finer differentiation in your product as longevity tends to cause competing products to get closer and closer to being identical. Plus, you must be ready for consumers to launch new features and try to distance themselves from you. The real goal here is to stop trying to prolong the inevitable. You need to start thinking about ways to disrupt your business model before someone else does.
Take Blue Apron, for example, this online meal kit delivery service was founded in 2012 and spent quite some time in the introduction phase before entering a growth phase in 2015. Competitors saw this and flooded the market, brands like HelloFresh and Home Chef. And then, Blue Apron hit maturity. They filed for a public offering in 2017, but as of May in 2018, they’ve lost 81% of their market value since that public offering. Growth is flat, the market is crowded, and now they’re forced to defend their turf and pursue differentiation.
Now, maturity isn’t bad, and it doesn’t always mean a loss in market value. It just comes with its own set of challenges. So then, what are the product marketing goals during this stage? For starters, understand what changes have occurred since the introduction and growth phases. Evaluate where the brand started and where it is now.
Really understand the consumer mindset.
-How did they become aware of the product?
-Why did they consider it? Why did they purchase it?
-Why did they not purchase?
Evaluate all the details. What are consumers saying about the competition and their products? Are they talking about any perceived differentiation or new features? Use this to arm your product team with ideas for new features and to modify your messaging and marketing angles.
Next, consider new marketing segments. It may be possible to redefine your target market or even enter new market segments altogether. Perhaps, Blue Apron looks at developing a college line. It may even be necessary to pivot and find different ways other markets can use the product.
Third, attack the competition, know that you’re at war. Apple’s iPhone is a mature product, and it never stops chasing after the competition. And the competition never stops chasing after the iPhone.
Fourth, seek bigger opportunities. Other key brand advocates and influencers that have emerged since the product entered the maturity phase, can they be engaged moving forward?
Are there new products in the market that are in their growth stage where alignment or strategic partnership becomes valuable, for instance?
Finally, leverage your loyal customers. Use those customers that are loyal and evangelist to your advantage. Survey them, offer them incentives, and consider ways to get them to spread the word to, late adopters and laggards who you know to be skeptical and difficult to convert.
The maturity phase is a great place to be, but don’t get complacent and assume that you’re in bedrock. It’s a different marketing game, so stay on top of it.
Decline Phase
When market maturity tapers off, products enter the final phase, decline. During the end stages of a product, you’ll see declining sales and profits. Consumers get bored, technology evolves, companies make mistakes, and people’s preferences change.
Consider a few popular technology products that have changed over the last few years. DVD subscriptions with Netflix shifted to online streaming. Apple’s iPod line is essentially now a simplified iPhone. Digital cameras are less popular, as phone cameras are sufficient. Standalone GPS products are being replaced by Google Maps on mobile phones.
Now, all of those products still have a foothold somewhere. They’ve just shifted to new markets and reduced distribution, cut prices, or adjusted the features. They’re in decline. It’s not over yet. But very few products make it out of this decline stage. They can hold on for quite some time, but they hit the bottom eventually.
Now, this isn’t to say the business is doomed, just that the product offered as-is by the business is likely on the way out. At this stage, your primary goal is to pick a strategy that makes the most sense for your product. Now, the most popular strategies are to reduce your marketing expense on the product and thin the teams out, implement price cuts to convince late-stage and laggers to buy the product, find another use for the product, maintain the product and wait for the market to shift back, sell the product off to another company, or discontinue it altogether.
Product Marketing tends to take a backseat once a product is in decline. There tends to be limited support for investing in marketing spend. Now, there’s little for marketing to do in a true decline, but products can flirt with the decline stage or even enter decline prematurely, and this can happen abruptly. A product in the midst of growth is all of a sudden fast-tracked to decline, and this typically happens for two reasons. The product saw too high a rate of a refresh, or the product failed to meet the necessary rate of a refresh.
In product marketing, you must keep a pulse on the consumer. It’s not strictly about the marketing campaigns. It’s about maintaining product-market fit. If you’re updating a product too frequently, changing the core features that consumers liked, you may see customers depart. Think about products that went through unnecessary redesigns, leaving consumers dissatisfied and confused.
Alternatively, some products fail to change. In some markets, consumers expect seasonal refreshes. They expect new features. The iPhone must always evolve. The market expects it. If Apple stops innovating, the consumer will pursue a brand or product that does. If you’re in decline, embrace it. Either sunset the product or find a way to reinvent it so that it moves back to an earlier stage of the lifecycle.
By creatively repositioning your product, you can change the way consumers evaluate it and potentially rescue them from decline, and push them back into growth.
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