A product goes through multiple stages across the course of its lifecycle. It is initiated when a business first proposes a tentative report regarding the product's development process. This is followed by manufacturing, introduction in the market, advertisements, and marketing.
The study of the life cycle facilitates the companies to predict future sales and returns, which in turn helps in better planning and control of any situation that might arise. Furthermore, it helps the business realize the demands for certain products and stock up to provide the best possible customer experience. Regarding reverse logistics , product life cycles allow the company to estimate waste management as it reflects significantly on the profit generations.
What is a Product Lifecycle?
Product lifecycle refers to the five stages a product goes through Development, Introduction, Growth, Maturity, and Decline. It is the period between the first putting the product in the market until it is brought down from shops.
This course of the product is taken into account by marketing and management companies to formulate policies best-suited to promote and sell the products. Based on the response from the masses, companies can decide to redesign brand ideas, manage price ranges, increase the market time or change advertisement tactics to give the product a longer life.
A product begins as an idea in a business that goes through multiple research and developmental procedures to find the marketing and advertising strategies most conducive to the product's longer, more successful lifecycle.
Stages in the life cycle of a product
A product starts its course when it is first pitched within a business. This is followed by considerable research to get extensive information regarding the customers' opinions, the potency of the product in the market, the probable competition it will have to receive from similar products, and simultaneously to strategize a suitable advertisement and introduction plan. Companies generally have a high expenditure but cannot collect revenue, considering the product's sale has not started yet.
This is the first and the most crucial stage in the product’s life cycle. In this stage, the product is literally born. The inventor or the manufacturer of the product visualizes and ideates the product. This phase decides everything for a product, from the design to the manufacutruing and distribution strategies.
This is the stage when the product is first launched in the marketplace. Some companies decide to build a location for the product before its launch, whereas some products can instantly acquire a colossal demand in the market.
This is when demands start building up as the company further progresses with its advertisement strategies to understand the market's pulse better and educate target customers about the product benefits and usage.
In the growth stage, customers start accepting the product, and the sales and demands are expected to go up rapidly. The market expands, and competition increases manifolds. More companies would want to take part in product sales.
During this stage, marketing emphasizes developing a strong brand image and establishing the product in the market. The company can gradually alter its marketing strategies, open up new methods for services, change price ranges, increase distribution, etc., based on the trends witnessed through the first course of the product.
Herein, the product sales mature, and the companies must bring in more incredible changes to stay afloat in the market. For example, reducing prices, amplifying features offered by the product, and any other strategy that helps the product have the edge over similar products in the market competition.
Differentiation is a crucial factor during this stage. Gradually, the product starts saturating the market as more and more companies begin taking up the market with similar effects.
After the product demand starts saturating, it goes into a decline stage. The product ceases to be received well by the customers. In such a situation, the company can revert its advertisement strategies, change price ranges, etc. But, discontinuation and replacement of the product is the most viable option.
Why is it essential to study product lifecycle?
1) Formulation of marketing and advertising strategies
The importance of the knowledge of the product life cycle is to realize the situation the product is in and formulate marketing and advertising strategies based on that. It gives the business an idea about the demands and expectations of customers.
2) Prediction of the future of a product
When a company understands the circumstances of the product market, it also helps them predict the future demand and supply situation to a great extent. Likewise, they can prepare their companies to aid the best services to their customers at the busiest times.
3) Forecasting the market for new product
It lets the company decide precisely when to tone down on the rush for one product and re-establish their policies to accommodate the lifecycle of a new one. It helps predict the decline of a product in the market.
How does reverse logistics apply to the product life cycle?
As mentioned earlier, the product life cycle study helps companies predict reverse customer logistics patterns and provide suitable options to organize operations systematically.
1) Streamlining of return requests
Knowing the background of a product and the demand it generally generates helps the logistics company streamline its products accordingly. Newly-introduced products naturally have greater demand, as they are in the early stages of their life cycle. They have to be assorted likewise so that customers do not face any delay in delivery due to too much order traffic.
2) Assortment of returned products
In reverse logistics, products need to be assorted to determine whether the product can be reused and redelivered in case of greater demands. Or if the company can send the products for remanufacturing, for instance.
This does not just help the logistics company get a better idea of the company dealing with products but also estimate an idea as to how the product demands and return requests might increase or decrease. This helps the company to be better prepared.
3) Deciding between disposal and re-usage
When the demand for a product saturates through time, for instance, returned products, the company needs to decide whether to reuse the products and replace the previous products or if the products need to be disposed of.
4) Generating solutions for waste management
Companies need to realize the importance of sustainable waste management in disposing returned products and packaging that can no longer be utilized for remanufacturing or repackaging. It matters to the company because it also.
Standard solutions for dealing with returned products
Even though finding effective ways to deal with returned products and the simultaneous wastes generated is a complex task, there are viable options to do the same.
1) Repackaging for restock
After thoroughly examining returned products, those in untouched and unused condition can be repackaged and restocked in the company's warehouse. Instead of ultimately disposing of the product, reselling becomes a much more sustainable option.
Reusing is also an excellent option for the management of wastes generated during reverse logistics, which will eventually lead to an entirely waste-free packaging system.
Companies pay a lot of attention to the amount of waste generated because it affects the number of profits acquired. It is a widely set observation that customers tend to gravitate towards companies with sustainable waste management processes.
Companies should have provisions for recycling returned goods and giving them a second life. The returned products can be assorted based on their condition. This way, the company can choose to restock them or sell them under second-hand options.
Furthermore, the packaging of returned products accounts for a considerable percentage of total waste generated. When companies ensure that packaging materials are sustainable and eco-friendly, it becomes easier to recycle materials.
Remanufacturing has gradually acquired prominence as a mainstream process. It is the process of restoration of utilized products to their previous condition.
The product, when remanufactured, reduces waste, saves money, and helps a company predict future return requests. It also helps in a better assortment of products for keeping an information repository.
Refurbishment is when companies process rarely used or completely unused products to give them greater relevance and usage. Products that, for instance, are in the last stages of their life cycle and sales are gradually levelling down can be alternatively used for producing newer products or remanufacturing similar products.
All these factors play an exponential role in predicting a company's efficiency and reach amongst customers. This includes complete knowledge from the initial stages of development and introduction to its gradual growth in the market. And then further moving on to saturation of its demands leading to its final stages when the product is in stages of decline.
This detailed knowledge lets the company know how to streamline return requests for products, assort products, manage wastes generated and dispose of them sustainably.
Based on a product's lifecycle, companies can also generate a plan for solving the question of how to deal with waste responsibly and sustainably so that the generated wastes do not affect the environment. Some ways to ensure this is reusing, remanufacturing, recycling, refurbishing and repackaging.