The product lifecycle (PLC) and new product or service development stages (NDP) are interconnected concepts that help businesses understand how products evolve from conception to eventual decline. Here’s an overview of both concepts and their relation:
New Product or Service Development Stages (NDP)
The new product development (NPD) process is essential for bringing new products or services to market. It typically consists of seven stages:
1. Idea Generation:
At this point potential product ideas from various sources are gathered, such as market research, customer feedback, and brainstorming.
In regards to PLC new ideas often arise during the decline stage of existing products or when growth opportunities are identified.
2. Idea Screening:
Here there is an evaluation of ideas for feasibility, potential market success, and alignment with company goals.
In Relation to PLC idea screening ensures that only those ideas with strong potential will proceed to the development phase.
3. Concept Development and Testing:
The objective at this stage is to develop product concepts and test them with a target audience to gauge appeal and potential success.
For PLC this testing in this phase helps reduce the risk of failure during the product introduction stage.
4. Business Analysis:
Analysing the financial aspects, including costs, sales projections, and profitability.
Regards to PLC accurate forecasting during this phase is critical to ensure the product can be financially viable during the introduction and growth stages.
5. Product Development:
This is the stage to create prototypes and finalize the product.
This stage is crucial as the product moves toward its introduction stage in the PLC.
6. Test Marketing:
At this point the new product (or service) is released in a limited market to gather real-world feedback.
Test marketing provides insights that help optimize the product before the full launch during the introduction phase of PLC.
7. Commercialization (Launch):
Time to Introduce the product to the market with full-scale marketing and distribution efforts.
This stage directly transitions into the introduction stage of the product lifecycle.
The product lifecycle describes the stages a product goes through from introduction to withdrawal from the market. There are typically four main stages:
1. Introduction
Key Characteristics here are Low sales, high costs, limited competition.
The focus here is building awareness and driving adoption. Heavy marketing and promotional efforts.
Challenges to consider include achieving product-market fit and educating the market.
In regards to NDP the introduction stage follows the development phase, marking the product’s first exposure to the market.
2. Growth:
Key Characteristics are Increasing sales, improved profitability, growing market share.
The focus will be Scaling production, improving the product, expanding distribution channels.
Consideration needs to be given to managing rapid growth and increasing competition.
In relation to NDP feedback from early users can lead to product iterations and improvements.
3. Maturity:
At this point expect to see Peak sales, market saturation, stable profitability.
Additional focus here will be differentiation through enhancements or value-added features.
The challenge is sustaining market share, combating competition, and dealing with price pressure.
In terms of NDP Refinements or additional features are often introduced during this stage to sustain interest and maintain a competitive edge.
4. Decline:
Expect Decreasing sales, shrinking market size, lower profitability.
It may be time for phasing out the product, reducing costs, and possibly replacing the product with a new one.
Decisions need to made whether to revive, discontinue, or pivot the product.
At this stage, businesses might start working on new products or services (NDP) to replace the declining product.
How They Work Together:
The Introduction Stage of the PLC coincides with the Commercialization stage of product development. The success of this phase relies heavily on how well the product development stages were managed.
During the Growth and Maturity stages of the PLC, feedback and performance analysis can inform future product development efforts, including incremental innovations or entirely new products.
As the product reaches the Decline stage, businesses often revisit the earlier stages of the NPD process (idea generation, screening, etc.) to innovate and bring new offerings to market.
In essence, new product development stages are the foundation that enables a product to successfully progress through the product lifecycle, helping companies manage innovation and competition over time.