Product life cycle
Product life cycle (PLC) is a model describing the stages a product passes through from introduction to market until its eventual decline and discontinuation, including introduction, growth, maturity, and decline, each requiring different marketing and management strategies (Levitt T. 1965, p.81)[1]. The Sony Walkman introduced a new category in 1979, grew explosively through the 1980s, matured in the 1990s, and declined as digital music players emerged. Apple's iPod followed the same pattern before streaming made it obsolete. Every product has a lifespan—the question is how long and how profitable.
Theodore Levitt popularized the concept in his 1965 Harvard Business Review article. The model draws an analogy to biological life cycles: birth, growth, maturity, and death. While the pattern is common, its shape varies enormously. Fashion items may complete their entire cycle in months. Coca-Cola has sustained its maturity phase for over a century. The practical value lies not in predicting exact timelines but in recognizing which stage a product occupies and adjusting strategy accordingly.
The four stages
Each stage has distinct characteristics:
Introduction
Market entry. The product launches to market. Sales are low as awareness builds[2].
High costs. Heavy investment in marketing and production ramp-up. Profits typically negative.
Strategy options. Rapid skimming (high price, high promotion), slow skimming (high price, low promotion), rapid penetration (low price, high promotion), or slow penetration (low price, low promotion).
Growth
Accelerating sales. Early adopters attract mainstream customers. Sales increase rapidly[3].
Emerging competition. Success attracts competitors entering the market.
Strategy focus. Improve quality, add features, expand distribution, build market share before maturity arrives.
Profitability. Unit costs fall with volume; profits typically peak or grow.
Maturity
Sales plateau. Market saturated; most potential customers have adopted[4].
Intense competition. Numerous competitors; price pressure; profit margins compress.
Strategy focus. Market modification (new segments, new uses), product modification (features, quality), marketing mix modification (price, promotion, distribution).
Cash generation. Often the most profitable stage despite slowing sales.
Decline
Falling sales. Demand decreases due to changing customer preferences, technology obsolescence, or substitute products[5].
Reduced profitability. Shrinking volume may not cover fixed costs.
Strategy options. Maintain the product and milk remaining profits, harvest by cutting costs, or divest by selling or discontinuing.
Strategic implications
The model guides decisions:
Resource allocation
Investment timing. Invest heavily in introduction and growth; harvest in maturity and decline[6].
Portfolio balance. Maintain products at different stages for stable cash flow.
Marketing strategy
Introduction. Build awareness; target early adopters.
Growth. Differentiate from competitors; expand market.
Maturity. Defend share; find efficiencies[7].
Decline. Minimize costs; serve remaining loyal customers.
Limitations
The model has boundaries:
Not predictive. Doesn't forecast how long stages will last.
Self-fulfilling. Assuming decline may cause it through reduced investment.
Oversimplification. Many products don't follow the classic pattern[8].
Controllable. Management actions can extend maturity or accelerate decline.
| Product life cycle — recommended articles |
| Product development — Marketing strategy — Product portfolio — Strategic management |
References
- Levitt T. (1965), Exploit the Product Life Cycle, Harvard Business Review, November-December.
- Kotler P., Keller K.L. (2016), Marketing Management, 15th Edition, Pearson.
- Day G.S. (1981), The Product Life Cycle, Journal of Marketing, 45(4).
- Shopify (2024), Product Life Cycle.
Footnotes
- ↑ Levitt T. (1965), Exploit the Product Life Cycle, p.81
- ↑ Kotler P., Keller K.L. (2016), Marketing Management, pp.345-362
- ↑ Day G.S. (1981), The Product Life Cycle, pp.60-67
- ↑ Shopify (2024), Product Life Cycle
- ↑ Levitt T. (1965), Exploit the Product Life Cycle, pp.84-89
- ↑ Kotler P., Keller K.L. (2016), Marketing Management, pp.367-378
- ↑ Day G.S. (1981), The Product Life Cycle, pp.68-73
- ↑ Shopify (2024), Product Life Cycle
Author: Sławomir Wawak