When entering the decline stage of product life cycle, your business will likely experience a significant decrease in revenue. So, how can you navigate through this phase? Let’s explore some options below
I. The 5 Stages of Product Life Cycle
The term “product life cycle” refers to the length of time from a product developed, first introduced to consumers until it is taken off the market.
It is widely used by business professionals as a framework to guide their decision-making process. This may include determining when it is appropriate to increase advertising, reduce prices, expand to new markets, or rebranding,… Here’re 5 stages of a product life cycle:
Before a product is introduced to the market, it goes through a development phase where companies invest in prototypes, testing, and strategizing the launch. In this stage, companies typically spend a lot of money without bringing in any revenue as the product is yet to be sold.
Involve producing a new product, developing a market strategy to generate awareness and interest among potential buyers. Slow sales are common as demand needs to be created for the new product, which can be a challenge depending on various factors such as: product complexity, innovation, and competition.
Demand for the product increases and competitors may emerge, leading to lower margins. Branding is crucial to maintain market position, as consumers have the option to switch to competitors. The marketing strategy should focus on differentiation rather than introduction.
This stage can be described as a period of stability, marked by stable sales and high customer demand. With competitors entering the growth stage, it’s essential to innovate and improve to maintain market position. Failure to do so can result in a decline and exit from the market.
This is when sales drop and customers lose interest in your product. Innovation is the key to preventing this. However, if your product has completed its life cycle and is no longer fulfilling its purpose, discontinuing it may be a wise decision.
II. What to do in the decline stage of the product life cycle?
Despite your product appearing to be on the verge of dying, there may still be opportunities to revive it. It’s important to seize this last chance and take action to prolong its life. The following suggestions can help your business move past the decline stage of the product life cycle
Innovate the product
Developing new versions of the product can help to compete with similar products in the marketplace. Optimizing old features or adding new ones, improving quality, or offering additional services to customers. Rebranding can also be a powerful tool to refresh the product and make it more appealing to consumers.
Changing the product’s design or name, for example, can create a new appearance that gives people a new impression and may persuade them to buy the product. An appropriate rebranding strategy can help differentiate the product from competitors and communicate its value proposition to potential customers. Taking this step during the decline stage of the product life cycle can be a wise decision.
Diversify the product range
You can consider offering complementary products that can be bundled with the main product. Or developing related products that can be sold to the same customer base. Expanding the product range can help reduce reliance on a single product which can be risky in the decline stage of product life cycle. Therefore it helps your business to maintain sales and profitability.
Digital marketing can also be a valuable tool in promoting these new products. Depending on the target audience, digital marketing channels such as social media, email marketing, or targeted ads can be used to reach potential buyers and drive sales.
If your product enters the decline stage of product life cycle and is no longer being purchased by consumers, it may be time to consider alternative uses for it. You can try to sell it in a different industry, or market segments. For example, Play-Doh was originally created in the 1930s as a wall cleaner, but found success as an arts and crafts tool in classrooms when demand declined.
Another example is Netflix, which originally offered a mail-order DVD service before pivoting to a streaming service, to cater to changing consumer preferences. By adapting to new market landscapes, businesses can discover new opportunities and extend the life of their product.
Use nostalgia marketing
In rare instances, products consumers from the past can make a comeback and experience a surge in demand, even surpassing their previous sales peak. This can be achieved by relying on nostalgia marketing, reminding consumers of positive past experiences with the product.
For example, Dunkaroos, a popular snack from the 90s and early 00s, was discontinued in the United States in 2012 but made a comeback in 2020 after a social media campaign. They still use nostalgia marketing to maintain their popularity and have released close to ten products. This is an excellent example of how to navigate the decline stage of product life cycle.
If the decline is irreversible, discontinuing the product may be the best option. This can free up resources to invest in more profitable areas or focus on developing new products. Keep in mind to carefully consider the costs and benefits of discontinuation and communicate with customers to ensure a smooth transition.
III. How Enosta can help you?
The decline stage of product life cycle can be a challenging time for businesses, but there are strategies that can help revitalise sales and extend the product’s life. From innovating the product to diversifying the product range, there are various approaches businesses can take.
If you need help navigating this phase, Enosta Agency has a team of strategic experts, especially in rebranding and digital marketing who can help you revitalize sales and reach new customers. Contact us now for a free consultation!