What is the Product Life Cycle?

The product life cycle refers to the stages that a product goes through in the market. It is a tool used in marketing to designate the conditions under which a product is sold. The conditions under which a product is sold change over time, this is what the product life cycle measures, so that sales strategies can be adjusted according to the stages of the product in the most appropriate way possible.

The market is not static, it is constantly moving. What was effective and popular a few years ago, today is nothing more than a memory at best. That is why, when devising a new product, its life cycle must be monitored.

The product life cycle (PLC) measures the evolution of a product’s sales over time. The department in charge of measuring it is the Marketing department and it is used to adjust the pricing, distribution and promotion strategies that a company applies to a product to its needs in the market.

There are no fixed stages; each product evolves independently. However, it is a good idea to compare sales of similar products to see how well a product is doing at a given point in time.

The stages of the product life cycle are as follows:

Introduction stage: This is the stage in which the product is newly introduced to the market, in which you are trying to establish the brand and ensuring the best quality of the product within the market. In addition to selecting the business model, distribution and initiating the promotion of the product.

Growth stage: At this stage, the quality of the product must be maintained, as well as paying attention to all the recommendations made by your customers regarding improvements that can be added to the product.

Maturity stage: In this stage, the main objective is to counteract the competition, so it is a stage in which you can lower prices to ensure that your competitors can not match.

Decline stage: In this stage, the ideal is to recognize the moment in which the product is no longer viable. It is time to create a new product and give it diffusion. It is also time to close the old operations.

The stages are not usually measured in equal parts, sometimes they last longer, sometimes they last less.

What is the Distribution Channel?

The distribution channel is the means used to get the product from its manufacturer to the final consumer. It can have a large number of links, which can complicate the arrival of the product and similarly negatively influence sales. There are two different distribution channels: The direct and the indirect. The first is to contact buyers directly, while the second is to pass the product through several hands.

Distribution channels are the channels through which a product is shipped, from the company in which the producer makes the products to the point of destination, which is the consumer. These channels can affect the product in many ways, from its price (if the distribution channel is more expensive, the product will also become more expensive) to its popularity among the public (the longer a product takes, the less likely it is that people will want to consume it), so it is important to be clear about which distribution channel we want to have for our product.

There are two main types of distribution channels:

Direct: This is a distribution channel in which the producing company sells its products directly to its buyers. This is normal for companies that sell industrial products.
Indirect: This distribution channel is when a company uses other companies or individuals as intermediaries in the sale of the product. This chain may have a large number of intermediate points to achieve the sale of the product.
Indirect channels are also divided according to their relevance and geographical location, which are responsible for the delivery of products in certain places.

Indirect distributors are further divided into two types:

Wholesalers: Wholesale distributors are the intermediary between the manufacturer and retailers. They purchase products and services in large quantities for resale to other wholesalers, other manufacturers or retailers. Wholesalers serve as a point of liaison between the company and other companies.
Retailers: Retailers are distributors who link the offerings of wholesalers or other retailers to customers directly. The main purpose of these distributors is to group different suppliers and create assortments for the final consumer and to grant credit and payment facilities.
The complex structure of the distribution channel brings together different businesses or organizations. It is therefore a highly complex structure of product transfer from the initial producer to the customer or end user.