Taking a Product to Market

Process of Creating and Taking a Product to Market

Process of Creating and Taking a Product to Market

Introduction

All products and services have certain life cycles. The life cycle refers to the period from the product's first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market? the product's life cycle management is very important. Some companies use strategic planning and others follow the basic rules of the different life cycle phase that are analyzed later.

The understanding of a product's life cycle? can help a company to understand and realize when it is time to introduce and withdraw a product from a market? its position in the market compared to competitors? and the product's success or failure.

For a company to fully understand the above and successfully manage a product's life cycle? needs to develop strategies and methodologies? some of which are discussed later on.

Part 1: Product Life Cycle Model Description

The product's life cycle - period usually consists of five major steps or phases: Product development? Product introduction? Product growth? Product maturity and finally Product decline. These phases exist and are applicable to all products or services from a certain make of automobile to a multimillion-dollar lithography tool to a one-cent capacitor. These phases can be split up into smaller ones depending on the product and must be considered when a new product is to be introduced into a market since they dictate the product's sales performance.

Fig. 1: Product Life Cycle Graph

Source: William D.

1. Product Development Phase

Product development phase begins when a company finds and develops a new product idea. This involves translating various pieces of information and incorporating them into a new product. A product is usually undergoing several changes involving a lot of money and time during development? before it is exposed to target customers via test markets. Those products that survive the test market are then introduced into a real marketplace and the introduction phase of the product begins. During the product development phase? sales are zero and revenues are negative. It is the time of spending with absolute no return.

2. Introduction Phase

The introduction phase of a product includes the product launch with its requirements to getting it launch in such a way so that it will have maximum impact at the moment of sale. A good example of such a launch is the launch of “Windows XP” by Microsoft Corporation.

This period can be described as a money sinkhole compared to the maturity phase of a product. Large expenditure on promotion and advertising is common? and quick but costly service requirements are introduced. A company must be prepared to spent a lot of money and get only ...