Importance of a Product Life Cycle for Making Right Decisions

Source: pexels.com

What is the product life cycle? How to take advantage of knowledge about a stage of a product in a product life cycle to make better decisions on a product strategy and product effort? Let’s figure it out.

In one of my previous posts about why any product effort is made, I introduced a concept of the product life cycle to explain how business objectives depend on the maturity of a product. Today I would like to dig into details on every phase of the product life cycle to understand how the extensive knowledge about each phase can help develop the right product strategy and then make the right product effort.

Product Life Cycle

Products, like people, have life cycles.

There are five stages in the product life cycle — development, introduction, growth, maturity, and decline.

A Product Life Cycle Model. Products, like people, have life cycles.

Like a human, a product is conceived and born. Then it grows and reaches maturity, gets older, and eventually ceases to exist.

Development

A new product like a child. You need to care passionately about it, dedicate a lot of time, and work for its successful future.

At this stage of development, a risk to implement a wrong product needs to be reduced. Very often an idea seems to be brilliant. To ensure that it is true, it is crucial to look at the idea from different perspectives to find answers to the following questions:

• is it feasible to implement the idea?
• are there resources to start and finish implementation?
• is the implementation of the idea solves a problem and brings value to a specific group of people?

Before the product is launched, its feasibility, value, usability, and business viability need to be validated by estimating development effort with a dedicated product team and testing prototypes with customers, users, and stakeholders. Put another way, product discovery needs to be done.

Introduction

After spending a lot of time validating an idea and solution, a product is ready to be released to achieve product-market fit.

After a release, the product attracts new customers. At this stage, it is important to continue product discovery and conduct quantitative research to figure out which features are not used as it was expected. Metrics can help make a better decision about what to do next with the product. For example, if a key feature is rarely used, there might be two options: conduct qualitative research to understand why it happens and enhance user experience or pivot the product to reach the market position by delivering another key value. The behaviour of customers and users should show what they like the most about the product.

Growth

After achieving product-market fit, the growth stage begins. The product brings business benefit, and a company should take advantage of positive cash flow. A company defines new business objective, e.g. to increase market share. In this case, product effort can be made towards the introduction of new adjacent features to attract more customers and diminish the presence of competitors who attempt to copy your product or bring the same value.

Maturity

Like a successful working adult, a product starts bringing the maximum value to customers and generating substantial revenue.

At this stage, very often companies defend market share and reduce the cost of operations to maximize profitability. Dedicated product teams may work on customer retention by improving user experience. Also, companies may invest in new disruptive innovations to target emerging markets. As an example, in 2015 YouTube launched YouTube Kids with curated selections of content, parental control features, and filtering of videos.

Decline

A business strategy of a company can be developed in a way to take the maximum advantage of existing features and customers of a product, cut investments, and eventually retire the product. There can be various reasons for doing it. For example, in order to defend market share, Apple develops better products that drive its other products out of the market. In 2014 Apple phased out iPod Classic since this media player has been embedded into iPhone. Also, Apple Music replaced iTunes.

Develop The Right Product Strategy

A stage of a product in the product life cycle should be always taken into account while a product strategy is developed and a decision on product effort is made. For example, does it make sense to optimize performance before a product is launched or add new features or target new markets before a product reaches any market position? If you do so, most likely, the product strategy is wrong. That leads to making the wrong product effort and wasting valuable resources. That’s why understanding where a product is in the product life cycle is crucial for its success.

As long as the product life cycle is compared to our living being, parallels between a product strategy and life strategy can be drawn.

All of us have a similar pattern of life before we become working adults. We are sent to preschool and then to school. During this period, parents do their best to give everything that we need. We grow, learn, and enter a university to obtain professional skills. At this stage, we find our place to be a part of society. These steps are crucial to finding a dream job to benefit both society and ourselves. Before we start working and getting a financial benefit we need to

1. acquire skills at a university;
2. make people aware of them by applying for various positions;
3. try to “sell” what we can offer during a job interview;
4. get hired.

These steps can be considered as a life strategy to take a rightful place in the labour market. It is based on common sense. This strategy seems to be obvious because we can’t get hired without having the necessary skills. In other words, step 4 is achievable if step 1 is taken successfully.

A product strategy for the product in the development and introduction stage can fit into this pattern. Let’s map an example of the life strategy onto the following product strategy of a swimming pool management and control app:

1. enable customers to control temperature, chlorine, and pH values (value proposition);
2. provide a usable interface on multiple devices (usability);
3. release the app;
4. make people aware of the app;
5. achieve product-market fit (the element of business strategy).

Many product companies fail because they may miss step 1 and get immediately to step 2 focusing on design and user experience without providing compelling value. The value is a “skill” without which “you can’t get hired”.

If our app was in the maturity stage, step 1 could be missed with low risk to damage the product. The value would be already validated and enhanced usability would help retain and attract customers.

Make The Right Product Effort

In one of my posts, I wrote that any product effort is aimed at the fulfilment of a business objective by making customers and users happy. A dedicated product team needs to keep the focus on those activities that contribute to the aim of the product effort.

Let’s imagine that a product is in the development or introduction stage. If there is a task to achieve a product-market fit, the team should place high importance on

• the market, customer, and user research;
• ideation activities to come up with solutions;
• product discovery including validation of value, usability, feasibility, and business viability;
• engineering.

Focus of product effort depends on the stage of a product in the product life cycle.

Now let’s assume that the product is in the maturity stage. Are market and customer research and product discovery still so important if a business objective to optimize existing product is defined? Very often product teams are busy delivering core innovations (serving existing customers and needs) by improving the usability or adding tweak changes.

Final Thoughts

The product life cycle model describes the stages of a product from when a first product effort is made until the product is removed from a market. The product lifecycle is similar to our living being.

Understanding of where a product is in the product life cycle can help develop the right product strategy and make the right product effort.

Parallels can be drawn between a life strategy and product strategy. Since we are more familiar with the life strategy, its pattern can be used for the development of the product strategy which depends on the product stage.

Also, as long as the stage of the product is known, a dedicated product team can focus on activities within the product effort that are most important.