Every product has a beginning, grows, reaches its peak, and eventually gives way to something new. That’s what we call the product life cycle, which reflects how its value evolves in the market.
Why is it important? Simple: market conditions aren’t static, competition increases, and consumer habits change over time.
Identifying which phase a product is in is essential for any company to better steer its campaigns—as well as to develop new products and respond quickly to competitors.
In this post, we’ll tell you everything you need to know…
It’s a process that describes the different stages a product goes through from the moment it’s launched until it’s no longer sold. This helps companies understand how sales, demand, and profitability evolve over time.
The model has four phases, and each one helps you make more accurate strategic decisions. This includes determining whether it’s time to adjust pricing, redesign marketing campaigns, diversify the offering, or invest in improvements.
In other words, it’s about anticipating market shifts to maintain a strong competitive position.
The stages of the product life cycle are:
Introduction.
Growth.
Maturity.
Decline.
Below is a description of each product phase:
This is when the product is launched, and companies seek to build awareness, generate trust, and spark interest among early buyers. Although initial sales are usually low, the goal is to gain visibility and positioning.
Of course, it requires a strong investment in promotion and distribution to build recognition.
In the second phase, the market starts to accept the product, sales increase, and competitors emerge. In this expansion, marketing strategies are applied to foster customer loyalty, improve the offering, and optimize production costs.
At this point, the product reaches its peak profitability. Therefore, sales stabilize, but competition also intensifies. Maintaining relevance requires innovating in design, service, or communication to prolong this stage.
Despite efforts and growth, sooner or later product demand begins to fall. This drop is inevitable—whether due to changing consumer preferences or the arrival of more attractive options in the market.
When this happens, it’s time to decide whether to renew the product, reinvent it, or withdraw it from the market.
Every product experiences the cycle differently depending on the market, technology, and consumer needs.
Below, we show real examples to understand how brands adapt their strategies to extend success and stay competitive:
It appeared as a technological innovation in 1994 (IBM Simon). Sales are low while consumers discover the product.
Adoption accelerated in 2007 with iPhone and Android devices. At the same time, manufacturers compete with annual launches.
There’s incremental improvement in cameras, batteries, and displays. In addition, most people already own one, and differentiation centers on ecosystem and experience.
The market starts to saturate, replacement cycles get longer, and new categories (foldables) appear.
Peak was in 2016.
Launched in 2008 as a cloud storage service, validated through a closed beta and forum demos.
Its referral program drove 3,900% growth in 15 months.
It consolidated with premium plans and collaborative features.
Today it remains active with new integrations and enterprise services.
However, it competes with Google Drive and OneDrive.
Our product entered the Mexican market in 2022 to offer digital dollar accounts. The priority was building trust with robust KYC and a simple app.
We expanded to Argentina, Colombia, and Brazil, and the Mastercard partnership strengthened positioning.
We consolidated the model with USDc deposits and transfers, cards, and an optimized mobile experience.
The current challenge is maintaining innovation amid new fintechs and changing regulations.
Today, at DolarApp we operate not only with USDc, but also with EURc.
As time goes by, consumer preferences, competition, and sales channels change. Each stage of the product life cycle requires a different marketing approach.
For that reason, companies should adjust their marketing mix (price, distribution, and promotion) based on the stage:
In the first phase, product marketing plays a key role, as it must introduce the product to the market.
Strategies include:
Defining a timeline that allows you to evaluate results step by step.
Creating launch campaigns that build anticipation.
Educating the market about product use and benefits.
Establishing initial distribution and support channels.
The product already has acceptance, so actions should focus on:
Strengthening the brand and communication with the customer.
Building loyalty among early users through programs or benefits.
Adjusting price and optimizing distribution according to demand.
Using quality indicators to measure customer satisfaction and product performance.
With a product in full swing, the goal is to maintain profitability, which is possible through actions such as:
Innovations or enhancements that keep interest high.
Optimizing operating costs and production processes.
Boosting customer service and extending the product’s life cycle.
Implementing software such as Google Workspace to coordinate teams, control costs, and sustain innovation through its tools.
When sales drop, brands should:
Reinforce communication with loyal or niche customers.
Analyze whether it’s best to renew, rebrand, or develop new products.
Reduce inventories and redirect resources to new lines.
Applying the right strategies in each product phase helps maximize performance and extend time in the market. In all stages, focus and optimization are key—and a method like Deep Work is useful to decide the best strategy.
Product life cycle analysis is based on studying:
Sales volume and market share to identify upward or downward trends.
Competition and positioning, which allows you to adjust product strategy and marketing.
Margins and cost to keep the product active and determine whether it’s profitable to continue investing.
Consumer behavior. This implies detecting changes in habits, purchase channels, or technology preferences to know whether the product remains relevant.
How is it done?
Companies rely on different methods, tools, and digital platforms. For example, models like Porter’s Five Forces help anticipate competitive pressure and margins in each product phase.
Graphic organizers are also useful to visualize every commercial or marketing action. Likewise, cloud platforms and digital channels integrate advertising, performance analytics, and direct communication with the consumer.
In addition, innovation is a key lever to sustain profitability. By applying the right improvements, it’s possible to reopen the demand curve, differentiate, and lengthen the maturity stage.
The product life cycle is like a map that helps companies make better decisions. It begins with market introduction, grows, matures, and eventually transforms or disappears.
When a company understands each stage of the product life cycle, it can respond in time to market changes. Essentially, it enables decisions about when to innovate, when to invest, and when to transform the product to preserve competitiveness.
Therefore, it’s a vital tool for optimizing strategies and extending product value in a constantly changing environment.
As we mentioned, DolarApp is a product for managing your finances from Mexico, Colombia, Argentina, and Brazil. Through the app, you can send, receive, and spend digital dollars and euros easily—without traditional banks.
You can also buy or sell currencies at a competitive exchange rate.
It’s the model that describes the path a product follows from launch to market withdrawal. It’s used to plan strategies, invest precisely, and maintain long-term product profitability.
Introduction, growth, maturity, and decline. Each phase requires different decisions regarding marketing, innovation, and pricing in order to optimize performance and extend market success.
Smartphones, digital apps, and fintechs are examples that show how a product evolves. They move from initial innovation to consolidation, then renew themselves through technological improvements or new models to remain competitive.
You should review sales, profitability, competition, and consumer behavior. This helps identify the current phase of the product, anticipate changes in demand, and define strategies to maintain or improve performance.
Sources:
Os países têm fronteiras. Suas finanças, não mais.
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