A guide to the product lifecycle: History of product lifecycle management, examples, and best practices
Last updated: September 2024
Launches get all the attention. But there is so much that happens before and after you release something new. A product evolves based on market conditions, customer preferences, and technological advancements — growing and changing until, in most cases, it eventually declines. This journey sometimes takes only a few years. But for highly successful products, it can take decades or more.
As a product builder, this means you might see your product through its entire lifecycle or only a small part of it. That is why it is important to understand the characteristics of this journey. You can best position yourself to manage your product successfully, no matter where it is in its evolution.
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What is the product lifecycle? And what is product lifecycle management?
This journey we are talking about is called the product lifecycle (sometimes abbreviated as PLC). The product lifecycle refers to how most products evolve and perform over time. It has six stages: product development, introduction, growth, maturity, saturation, and decline. We will share more on that later.
Although the product lifecycle is usually referenced in universal terms, the details are always situational. A PLC at a multinational corporation with a large portfolio of products and many resources will look very different from a scrappy startup with a small team. (Unless, of course, that startup enjoys wild success and becomes a multinational corporation.)
The PLC is especially important in software, where new products can be built quickly and innovation occurs at breakneck speed. And understanding PLC concepts as a whole is a useful way to identify overarching patterns and evaluate how your product strategies could shift over time.
But the actual process of overseeing your product's journey involves specific activities and decisions at each stage. This practice is called product lifecycle management (PLM). The goal of PLM is to make product development processes more robust and efficient, helping you get to market faster while extending your product's longevity. That way, you can create value for customers and the business for as long as possible.
This guide explores each stage of the product lifecycle and PLM practices in depth — so you can better understand your own product and use that knowledge to make informed decisions. Use the following links to jump ahead to a specific section:
A brief history of the product lifecycle and product lifecycle management
What are some best practices for product lifecycle management?
A brief history of the product lifecycle and product lifecycle management
The concept of a product lifecycle gained critical attention in 1965 when economist Theodore Levitt published an influential article titled Exploit the Product Life Cycle in Harvard Business Review. Levitt pointed out that although most business leaders were aware of the product lifecycle, few were incorporating it into their product strategy or decision-making. Levitt noted that decisions made today should consider the next stage ahead.
This idea of factoring the PLC into product decisions took hold in the 1980s. American Motors Corporation (AMC) accomplished the first highly successful example. Facing competitors with larger budgets, AMC needed a way to innovate more quickly and efficiently. So, the company looked for ways to improve its product development process. By incorporating early computer-aided design technology, data management tools, and better communication systems, AMC was able to streamline production at drastically reduced costs and bring new models to market faster than competitors. This type of approach is what we now refer to as product lifecycle management.
Since then, PLM has expanded from manufacturing to all types of products and industries (including software). And it has become even more important as organizations coordinate product development across global teams and supply chains, and as demand for new technology continues to speed up.
Product lifecycle vs. product development lifecycle
It is important to quickly note that the lifecycle of a product is not the same as the lifecycle of the product development process. Product development focuses on taking an offering from concept to launch, then continuously refining it for customers. It is an ongoing effort that feeds directly into the product lifecycle. In fact, product development is considered to be the first stage of the PLC — like a cycle within a cycle. This will become clearer in the next section.
Related:
What are the stages of the product lifecycle?
The number of stages in the product lifecycle is not firmly prescribed. Levitt suggested that it has four: introduction, growth, maturity, and decline. More contemporary thinking maps it across five, adding product development as a first stage.
Given the proliferation of products — especially in software, where it is relatively easy to introduce and enhance offerings — we think it is also worth adding a sixth to the list: saturation. Expanding the PLC to include saturation allows for a more nuanced delineation between maturity and decline.
As we examine each of the stages, keep in mind that a variety of factors impact how a product moves through its lifecycle. Not all products reach every phase. Some products never make it to market, and many flounder after launch. The product might not actually solve a real problem. Or there might not be enough demand to sustain a lasting business. Certain elements of the customer experience could be too weak to generate loyalty. Company size and the sophistication of the organization's product development discipline also impact each stage.
But in general, you can find many examples of successful products that follow a similar lifecycle pattern. Common trends and activities define each stage, especially in software where the PLC is well established. Let's dive in:
1. Product development
The product development stage encompasses everything from early-stage ideation and research to planning and actually building a product. Typically, company leadership sets the strategic direction, including a theory of how a new offering will create value: the product vision. This strategy is informed by market and customer research.
The core product development team works closely together and prioritizes building what will best achieve that strategy. For many years, the proverbial wisdom was that you need only to deliver a minimum viable product, getting to market as quickly as possible with as little as possible. But today's forward-thinking product teams focus on delivering a Minimum Lovable Product (MLP) — the minimum required for customers to love (and not just tolerate) a product.
Examples of activities that occur during product development include:
Setting the product strategy
Researching the market, customers, and competitors
Brainstorming and refining product ideas
Creating an early-stage product roadmap
Prototyping and testing functionality
Developing an initial offering or MLP
2. Introduction
The introduction stage centers around the go-to-market strategy. This includes defining product positioning, a promotion plan, and timing for a launch event. Product teams gauge how well they assessed product-market fit during the development stage by analyzing the early market and customer feedback. The goal is to identify and act on opportunities to refine the MLP.
Some organizations choose a beta program, giving a small group of users early access in exchange for detailed information about their experience using it. Beta programs can be a valuable opportunity to make product enhancements before releasing to a larger audience.
Examples of activities that occur during introduction include:
Crafting a go-to-market strategy
Building out a launch plan
Fixing bugs and enhancing functionality
Prioritizing features on the product roadmap
3. Growth
The growth stage is when customer demand for the product increases. Users are becoming familiar with your offering — folks are actively using and purchasing it. This is always an exciting time for product teams. Momentum builds, and you have the opportunity to deliver more value to more people.
The growth stage is typically when the market begins to expand. Other companies might want to capture a share of it for themselves. Establishing your product's place and demonstrating why it is the best solution becomes vitally important.
Examples of activities that occur during growth include:
Defining a longer-term product roadmap
Investing in paid advertising efforts
Scaling sales and support systems
Soliciting customer success stories
4. Maturity
The maturity stage is when growth stabilizes. Products in this stage are well known and loved by users. However, the return on advertising efforts often begins to diminish, and sales (although steady) might soften. Competition is increasing, so maintaining market share is critical. You might see product messaging that includes claims of being the "best" or "most trusted" solution during this stage.
If you are fortunate, maturity is the longest of the six stages in a product's lifecycle. Product teams that enjoy lasting success focus on continual improvement — looking for ways to cut costs, attract new users, reduce churn, and grow existing accounts.
Examples of activities that occur during maturity include:
Focusing on innovation strategies
Improving user experience
Expanding customer marketing programs
Exploring cross-promotion and partnerships
5. Saturation
The saturation stage is a plateau period. There is a glut of alternative solutions, and users might be more interested in trying newer offerings over existing ones. Some people lump saturation in with maturity. But there are subtle differences that present unique challenges.
At this stage, the product team has likely released many different versions of the product. Finding innovation opportunities (rather than rote enhancements to existing functionality) can be difficult. As new customer acquisition slows, product development efforts often shift to retaining existing customers. However, executive teams looking ahead might use this time to pivot and transform — cycling back to the development stage.
Examples of activities that occur during saturation include:
Developing add-on functionality
Making significant changes to the user experience
Offering specialized services
Targeting new use cases
6. Decline
The decline stage is when demand for the product begins to diminish. There are a few reasons that decline might occur. Competitors could have outflanked you in pricing, services, or functionality. Or the overall market size might have dwindled.
But decline does not necessarily mean the end. Product teams who were actively engaging in transformation efforts during the saturation stage are often better poised to jump back to an earlier stage.
Examples of activities that occur during decline include:
Leveraging functionality to enter a new market
Adjusting pricing structures
Developing a plan to sunset the product
What is an example of the product lifecycle?
Real-world case studies make theories more tangible. Let's consider an example of a product at each stage of the PLC for Microsoft Encarta. This example is particularly helpful because it follows a product through a transformational time in technology. It also shows how the product team adapted to changing preferences before it was eventually discontinued.
Product lifecycle stage | How Microsoft handled this stage |
Product development | A digital encyclopedia was a pet project of Microsoft founder Bill Gates. Research began in the mid- to late 1980s. After approaching (and being rejected by) Encyclopedia Britannica about a partnership, Microsoft purchased rights to some content from another existing encyclopedia and began to build out a new multimedia offering. Product differentiation included high-quality graphics and interactive sound clips. |
Introduction | Microsoft engaged a marketing agency to help come up with the final product name: Encarta. It launched in 1993 as a CD-ROM that cost $395. Pricing was chosen based on early focus group sessions where customers said they would be willing to pay up to $1,000. This figure aligned with the price point of a print edition of Encyclopedia Brittanica, which at the time cost $1,400 for 32 volumes and released twice a year. |
Growth | Encarta sold slowly at first. Noting that Compton's, another CD-ROM encyclopedia, sold a much higher volume with a significant discount (marked down from $395 to $129), Microsoft relented to pressure from internal sales teams and dropped the price of Encarta to $99 for a holiday promotion. It sold 350,000 units during the promotion, and the price never reverted. Sales soared past one million units in 1994. |
Maturity | Microsoft began to distribute Encarta as part of a software bundle included with computer purchases. The editorial team of researchers and indexers grew throughout the late 1990s, adding new content to Encarta and translating the English-only encyclopedia into a variety of languages to reach international markets. |
Saturation | An online version of Encarta was released in 2000. In response to shifts in technology and consumer behavior, Microsoft made some of the content available for free. Wikipedia also launched in 2001. This entirely free online encyclopedia (edited by volunteers rather than paid researchers) rapidly overtook Encarta as internet use proliferated. However, Encarta held steady in some international markets that did not yet have widespread internet access. |
Decline | Microsoft transitioned maintenance of the product to a third party, and entries became outdated. Microsoft further slashed Encarta's prices to $22.95 in 2009 before announcing that it would discontinue Encarta that year. Existing subscribers were offered a refund — and most people were no longer willing to pay for information that could be found elsewhere for free. |
Related:
What are some best practices for product lifecycle management?
If we could provide step-by-step guidance on how to manage your product through each lifecycle stage, we happily would. But this is unrealistic for a couple of reasons. For one, we cannot predict the future. Who is to say what markets, customer needs, and technology will look like years from now? As you learned in the Microsoft Encarta example, these changes can have a large impact on how your product moves through its lifecycle.
Here is another important reason: No one understands your product like you do. You can read all about strategies for product lifecycle management, but it is up to you to evaluate and apply what makes sense for your business.
In any case, effective product lifecycle management begins with understanding what stage your product is in. If you are working on a new product that has yet to launch, this is easy. But things get trickier if you are managing an existing product, as there is often overlap in the middle stages. Take a closer look at business and product metrics and gather market research to help.
You can then explore the specific strategies that other teams employ at your current stage. You can also pinpoint growth opportunities within the product lifecycle that would make sense for your product's position. For example, you would not want to invest significantly in a product that is at the end of the decline stage as a last hope. It would make more sense to plan for its retirement and refocus on what is next.
With all of this in mind, know that there are some universal best practices that can help you be more strategic, aligned, and efficient in your approach to product lifecycle management. This is true no matter which stage you are at or what type of product you sell. Consider doing the following:
Set goals: Be clear on what you want to achieve and why — as a business, as a product team, and even in regards to the PLM effort itself. Read more on product strategy.
Define value: Moving through the product lifecycle hinges on a continuous exchange of value between you and your customers. Be sure to establish what that value means for you. Read more on product value.
Get input: Rely on the experts who surround you — their buy-in and effort are necessary to move your product forward. Always share and solicit ideas for improvement with your team. Read more on stakeholder alignment.
Audit processes: Much of product lifecycle management is process-driven. Scan your current workflows for friction and waste. Then, make a plan to improve. Read more on product team processes.
Choose tools: The right software can offer better ways of working throughout the entire product lifecycle. Read more on product development software.
Document practices: As you introduce changes and explore what works (or what does not), capture your own PLM best practices so the whole team can learn and benefit. Read more on product documentation.
Monitor data: Keep an eye on revenue, product engagement, and customer feedback. Use this to understand how your product is moving through the PLC and spot new growth opportunities. Read more on product metrics.
If you are curious to see more specific examples of what goes on throughout product development, check out The Aha! Framework. We published our process complete with the various activities that happen throughout it. Even though it is not quite the same as product lifecycle management (it is more about how we build software), it can give you an idea of how a real company (hint: us) takes steps to optimize the way it works — so everyone can create more value through the PLC.
We also built Frameworks functionality into our software. You can use this feature to capture and share your own workflows, including your product's lifecycle. Try it out.
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Templates for product lifecycle management
Since product lifecycle management looks different for every organization and product type, there is no set way to approach it. But all products that experience meaningful growth and longevity do have some things in common — they are built by organizations who deeply understand the market landscape, and more importantly, what they want to achieve long-term.
If you want to be more mindful of your own product's lifecycle and the opportunities within it, these collaborative whiteboard templates are a good place to start. Each one is equipped with expert guidance to help you shape your thinking:
Business model template
Explore foundational questions about your business and refine your product strategy. Map out key objectives, customer targets, growth opportunities, and more. Read more about the business model template.
Porter's 5 forces template
Analyze five factors that shape the competitive landscape so you can better plan for the future. Research buying power, alternate solutions, existing competitors, new rivals, and partner leverage. Read more about the Porter's 5 Forces template.
Product vision template
Set your vision for where you want your company or product to be in the future. Define your product's strengths, weaknesses, market size, and more. Read more about the product vision template.
Opportunity canvas template
Identify potential opportunities for new products, features, or improvements. Capture user challenges, existing solutions, solution ideas, business impact, and more. Read more about the opportunity canvas template.
