The product life cycle (PLC): are there 4, 5, or 6 stages?
They say that cats have nine lives. But, as it turns out, so do products.
In fact, if you’ve been in the eCommerce business for a while now, you know that developing a new product can take years. Then, even after it has been brought to market, your product will likely require constant innovation to stay on top.
Consider Apple. The iPhone was sold in 2007. Today, the iPhone occupies the pockets of an estimated one billion users. But if you were to compare the iPhone 13 against the iPhone 1, the two would have more differences than similarities. Moreover, nobody would dish out money to buy the iPhone 1 these days, whereas many still flock to the iPhone 13.
This is the product life cycle (PLC) in action. Needless to say, it’s crucial for your business to have a firm grasp of the PLC. In this blog, we’ll cover the various stages of PLC and how to properly manage PLC for your business.
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What is a product life cycle (PLC)?
Product life cycle (PLC) refers to the span of time from when a product is introduced to consumers to when it ages out of the market. This is generally broken down into several stages, though the exact number of stages is debated.
It all started in the 1960s, when economist Raymond Vernon first introduced the PLC theory. Vernon banked on the idea that no product lasts forever. Just like a child who hits puberty, then comes of age—a product has a definite lifespan and periods of growth.
Today, the PLC theory is a widely adopted concept, impacting the type of stock a business orders to the types of marketing it employs. It’s highly possible that you, too, may be applying the PLC theory without even realizing it.
What are the stages of a product’s life cycle?
How many stages does the PLC involve? Some sources say four. Others say five.
From an eCommerce perspective (see our guide on what is eCommerce), we’d argue that six makes the most sense. By breaking down the PLC into six distinct stages, you can more easily track how a product moves between various hands, and create targeted strategies for each part of the process.
At this stage—the earliest stage of the PLC—your product idea lives with the manufacturer. Your idea is being heavily researched, tested, and prototyped before blooming into a product that’s ready to sell.
This stage can take many, many years (depending on your type of business). Tide, for one, spent eight years in the development stage for its Tide Pods. During that time, the company came up with more than 450 sketches for product and packaging. They also involved 6,000 consumers in the research process and developed various formulas, including the Free and Gentle line of unscented pods.
At this point, your product is introduced to the market. In other words, it’s officially launched. If you’ve already started promoting your product while it was in the development stage, then you’re probably entering this stage with lots of momentum.
Case in point: while the iPhone 1 was being developed, Apple did what it does best. It generated buzz for the iPhone by unveiling the first working prototype in January 2007 (the phone wouldn’t be available for purchase for another six months). We all know how this story goes: Apple sold 1.9 million iPhones that first year—a notable success for a product that was so ahead of its time.
By now, consumers are aware of your product, and there’s real, growing demand for it. Competitors are starting to crop up. New feature requests are coming in. Your team is having to field customer questions.
It’s reminiscent of 2008, when the iPhone was one years old and Google launched the first Android smartphone. Shortly afterwards, Microsoft Windows followed suit, as did Samsung with its first Galaxy Tablet (a touchscreen device that competed with the Apple iPad). By January 2011, smartphones began outselling PCs worldwide, with Gartner reporting 100 million smartphones versus 93 million PCs sold in Q4 2010.
This stage marks the end of rapid growth. At this point of the PLC, your item is a familiar product. Many of your target consumers own it. Sales—while potentially high—are beginning to level off. This is simultaneously considered the most profitable stage of growth, and is often the most innovative.
This stage is likely accompanied by updates to your product: new flavors, new scents, new features. Competition is fierce. For this reason, your product prices may drop to stay competitive with new manufacturers. You’re challenged with differentiating your product and improving brand positioning in order to claim titles like the “most trusted brand.”
By some definitions of the PLC, saturation is bundled into the “maturity” phase of the PLC. However, we believe it’s worth its own callout, since this phase presents a unique set of traits and challenges.
During this stage, most people in your market own your product. Innovation is more difficult because you’ve already released many versions of your product. And competition, of course, is at an all-time high.
On the bright side, your consumers understand your product. That market is mature and eager to use products like yours. Your focus is therefore less on educating people about your product, more on cultivating loyal customers and creating a strong community who supports your brand. Your product is at risk of declining if you don’t differentiate your brand.
Alas, all good things must come to an end. Some products decline because they’ve aged out of the market from a technological standpoint (we’re looking at you, Blackberry). Others become obsolete because they’ve lost market share and/or failed to adapt.
The story of Yahoo is one to keep in mind. While once the most-visited website in the world, Yahoo fell from grace after Google came ago.
“Yahoo had a very narrow mind-set, which was, ‘We’re going to grab content, put it in front of our users, and call it a day’,” former creative director for Yahoo, Tom Parker, told Fast Company. “They owned the world, but they weren’t looking to the sky.”
The full PLC in action: Tide Pods
To see the full PLC in action, let’s think about laundry detergent. Prior to 1945, when the modern washing machine became available, most people cleaned their clothing using a scrub board and plain soap.
The 1960s welcomed enzymatic laundry detergents, stain removers, and pre-treatments for the first time—followed by fabric conditioners/softeners in the 1970s. Laundry detergent went through many more iterations over the next 40 years, including temperature detergents, color-safe bleach, and biodegradable/green detergents.
Then, Tide Pods came around. This single-dose laundry detergent encased in water soluble polyvinyl alcohol (PVA) pods marked a revolution within an already oversaturated space.
In 2012, Tide Pods entered the “introduction” stage of its life cycle. In the years that followed, Procter & Gamble invested heavily into educating consumers on the pod and creating demand where there was none.
Once the pods became mainstream, P&G pivoted its strategy to create new versions of the product with varying features, like odor control, hypoallergenic materials, softening, etc.
This brings us to today. The ubiquitous laundry pods are now solidly in the maturity stage of their life cycle, continuing to evolve.
Why a PLC management strategy is important for eCommerce businesses
As demonstrated above, eCommerce tactics and strategies are inextricably linked to product life cycles. Depending on the stage of your product, your business will take a specific approach to marketing, product development, customer support, and other essential efforts.
If you’re in the development stage, you’re likely focusing your energy on educating your consumers and achieving product-market fit.
If you’re in the introduction stage, you’re focused on building interest. You might be creating a market that didn’t previously exist or striving to take market share from an existing product or category.
If you’re in the growth stage, then you might be optimizing your product and/or collecting feedback from your customer base.
If you're in the maturity stage, then you’re likely launching new features or variations of your product, hoping to scale product sales and earn repeat customers.
If you’re in the saturation stage, you’re re-evaluating your core differentiators, including price and customer service.
If you’re in the decline stage, you’re looking to revive demand, diversify your audience, or offload excess inventory to make room for new products.
The PLC, in a nutshell, helps you to remain realistic about your product’s saleability and to focus your energy appropriately.
The iPhone: a product life cycle success story
We know we’ve mentioned the iPhone several times already (and no, this is not a sponsored post). However, the iPhone is—without question—a brilliant example of the PLC. It’s a testament to how a product can survive in the growth or maturity stages for many years before ever reaching its last days.
Here’s how that shakes out in Apple’s case:
Development (2007) - Apple announces that the iPhone 1 is in development, with Steve Jobs holding the first iPhone on stage at the Macworld convention in January 2007. The new phone woos its audience with its ground-breaking features: headset controls, camera, internet access, and text messaging all packed into a 3.5” touchscreen device.
Introduction (2007) - The iPhone officially hits stores in June 2007. Apple sells a modest 1.4 million iPhones that year—then nearly 12 million the next year.
Growth (2008 - 2014) - Apple introduces the iPhone 3G, selling more than one million devices in the first weekend alone. Subsequent iPhone models continue to gain traction, attracting a loyal fanbase. As customers grow more comfortable with iPhones, Apple tests different display sizes, device types (e.g., the Apple Watch), and increasingly sophisticated cameras.
Maturity (2015 - 2018) - Unit sales for the iPhone peak in 2015 at 231.2 million phones sold—up from 169.2 million in 2014. Sales range from 212 to 218 units per year throughout 2016 to 2018. Apple faces competition from Samsung, Google, LG, Motorola, and the like.
Saturation (2019 to present) - More than 6.6 billion people worldwide now own a smartphone. That’s just under 84% of the world’s population. Apple dominates the smartphone market, owning 31% of global market share as of Q4 2021. This is down 34% from the previous year, but still well above their closest competitor, Samsung, which held 8% market share in Q1 2021.
Decline (to be determined) - The iPhone has yet to see its final days. Despite an overall decline of the smartphone industry in Q3 2021 due to supply chain issues, sales for the iPhone 13 creep up to 15%. Can Apple continue to adapt and keep up? Time will tell.
Stay ahead of the product life cycle
There’s no mistaking that the product life cycle is integral to everything from your eCommerce marketing strategies to inventory management. Whether you’re considering a new ad campaign or deciding on your pricing strategy, it’s critical to know which stage of the PLC your item is in.
Avoid spending time on activities that are meant for items in the introduction stage. Or, know when to cut your losses when your product is in decline.
Allison Lee Editor, Wix eCommerce
Allison is the editor for the Wix eCommerce blog, with several years of experience reporting on eCommerce news, strategies, and founder stories.