It’s easy to say “let’s develop a new product”: it has been our job for 30 years, and we certainly know how to do it.
However, when we evaluate together with our customers what could be the most suitable development path for their market proposition, we always take into consideration their existing range of products, to understand – basing on the life cycle of each of them – the real need for create new products (therefore new investments), or whether it makes sense to evaluate the restyling or updating of existing ones, and also to understand – especially when the offer is very wide – which products/models to develop in priority.
And you? Have you ever tried to “put pen to paper” the life cycle of your products?
Have you ever wondered what stage each of them is in?
To do this, the first thing to do is obviously understand what the life cycle of a product is.
In a certain sense, we can compare a product (in particular the trend of its sales) to a living being: it is born, grows, develops, lives adulthood, gets old, and fatally “leave us”.
Even for a product we can identify four phases:
- The Introduction phase, when the product is almost unknown and has yet to establish itself on the market: in this phase, sales are very low, just slightly growing.
- The development phase, when the product begins to establish itself on the market and increases its awareness and diffusion: sales grow strongly.
- The phase of maturity, when the product is now well known, appreciated and widespread: sales are stable at high levels.
- The phase of decline, when the product gradually loses appeal and begins to give way to solutions and / or products perceived as more suitable to present-day: sales are decreasing, more or less markedly depending on the characteristics of the market, in any case progressively worsening.
At this point, you just need to analyse the sales performance of each of these products to understand what stage they are in. Obviously we must be careful to correctly interpret this data, especially if we use intermediaries who have a warehouse: you have to consider the sell-out (from the intermediary to the end user).
Now that we understand what phase our product is in, we can think about which are the most appropriate decisions to make:
- If we are between the end of the development phase and the beginning of the maturity phase, it may be useful to intervene on the range depth, introducing some new variants to the product to give the customer a wider choice (perhaps in line with market trends), and in any case to provide an image of a dynamic company that always keeps its offer updated.
- On the other hand, when sales stabilize and begin to show the first signs of decline, it is good to evaluate the opportunity to carry out a product restyling: this can be merely aesthetic, or it can involve some construction and/or production process characteristics, to renew the product and improve its competitiveness and profitability.
- Even if it would be ought to avoid (or postpone as much as possible) the decline phase, sometimes that’s inevitable: in this case a rethinking of the product, including a strategic re-examination of the market positioning up to a design from scratch, will allow you to maintain the positions you have acquired, making the most of the relationships you have consolidated over time.
Making the right choices at the right time allows you to maximize the return on your investments,
and to make the most of your positions on the market, always maintaining a high level of relationship with your customers.
Do you like to learn more, and get a personalized consultancy?
