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The product life cycle, also known as the product lifespan, is a concept from business administration that deals with the phases of the life of a product or service. It is often used as a graphical representation to highlight the different phases: Introduction, Growth, Maturity and Decline. Each phase brings its own specific challenges and opportunities.
The product lifecycle is a very useful concept for companies of all sizes, as it can help them identify opportunities and be prepared for challenges. By properly analyzing the lifecycle of the product in question, companies can identify which phase elements are most promising and what actions need to be taken to achieve the maximum possible success.
For a successful and sustainable corporate strategy, it is essential to understand the product life cycle. It describes the development of ideas into new products and services, their promotion, distribution and replacement by new technologies or new competitors.
The term "product life cycle" is often confused with the innovation cycle, although it is different from it. The innovation cycle describes the development of a product or service from the idea to the market launch. In contrast, the product life cycle refers to the entire life of the product or service, beginning at development and ending after the product exits the market.
Comparing innovation and product lifecycles makes it clear that the latter focuses more on process, while the former focuses more on innovation - whether technological or strategic - to create new opportunities to generate revenue.
|Phase of the Product Life Cycle
|Measures in Marketing and Sales
|High investment in research and development, finance advertising campaigns
|Costs for research and development decrease, High use of funds for sales & intensive marketing activities
|Leeway for price discounts or other forms of customer experience
|Market is saturated, development of new sales channels necessary
The product life cycle is an important concept in business administration. It describes the various phases of a product from its creation to its end. More precisely, it describes the development, marketing and sale of the product. Thus, it can be said that the product life cycle forms a kind of framework within which companies can develop their strategies and measures. The product life cycle consists of four phases: Introduction, Growth, Maturity and Acceptance.
One of the main reasons for the shortening of the product life cycle is the increasing competition on the market. More and more companies are producing similar or the same products, which is driving down prices and causing newer models to spread faster than before. Customers also expect companies to produce better and newer products with innovative features. To meet this demand, companies must develop and implement new ideas every day to stay ahead of their competitors.
In addition, technology plays a crucial role in the build-up and tear-down of product cycles. In recent years, technology has advanced rapidly and this has changed the market. New technologies make it easy for companies to develop and implement innovative ideas. This means that companies need to find faster ways to improve their products or launch new models to keep up with the competition. All these factors contribute to the fact that the product life cycle is becoming shorter and shorter. The trade-off between quality and speed is also an important aspect of shortening the life cycle of products. When a company offers its customers high-quality products and at the same time tries to increase its sales, it must be able to handle its processes as efficiently as possible. Therefore, it must simplify and optimize its process and apply other strategies to save time. By doing this, it can significantly reduce the life cycle of its products. In order to remain successful, each company must find the right way to take on the challenge of the rapidly changing market and at the same time be able to produce high-quality products.
In order to extend the product life cycle, it is important to develop innovative ideas to enhance the product or service. Innovation is the key to avoiding wear and tear on existing products and increasing their value. Companies should therefore always be looking for new ways to add more value or identify areas for improvement. In addition, companies should always be ready to adapt to the dynamic demands of the market by leveraging innovation and taking effective action.
Another way to extend the life of a product is to use cross-marketing strategies to involve other areas of the company or other companies to promote the product. Cross-marketing strategies not only help companies find customer groups for their product, but also allow them to reach customer groups that were normally unreachable for this type of promotional activity.
Investing in targeted marketing can also increase sales and thus help extend the life cycle of a particular product. Strategic marketing measures can help attract new customer groups or bind existing customer groups more closely to the company. Here, too, innovation plays an important role in developing new approaches to attracting clientele and providing high-quality content.
The product life cycle is a very important part of business administration - it provides information about the success or failure of a product based on the different phases of the life cycle and thus enables the company to remain profitable or even become more profitable.
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