Every manufacturer and distributor of after-market parts needs to know the different stages of their product life cycle to ensure inventory levels are being accurately forecasted and replenishment reorder points are in alignment with customer demand.

Different stages of a product life cycle

From the time a new product is launched to the market, it will invariably go through a typical life span where demand will traverse though nine different demand types from initial product launch to the end of the life cycle.

As the product moves through the demand stages that are outlined in Figure 1. 2, different forecasting and planning techniques are required to effectively forecast demand. Figure 1 2 illustrates how a product life cycle changes over time as it migrates from one pattern to the next.

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The four main stages of a product life cycle are:

1 | Launch:  There are heavy distribution and promotion expenses to sell this new product and an inventory planner may need to increase inventory levels to ensure product is available as sales begin to rise.

2 | Growth: As a product increases in popularity with consumers, sales will start to rise. It may be a rapid growth or a slower one, but the growth trend will still be positive. Growth rates can be highly variable and sporadic. Successful inventory planners will frequently run demand forecasts to ensure they have the right stock levels, safety stock and reorder points to optimize their cost model while ensuring a high order fill rate.

3 | Maturity: Once the product is well established and the consumer marketplace has been saturated or has met their satisfaction with the product, then the growth slows down and begins to level off. In this stage, inventory planners will typically see erratic, slow or fast spikes in customer demand. This demand pattern type can vary greatly and will require frequent forecasts to ensure stocked items are optimized.

This is the primary stage of the product life cycle where managers of stock will want to begin inventory planning to reduce their target customer service levels in order to lower inventory levels for the oncoming decline of product demand.

This is a difficult transition for most companies as they do not want to risk missing sales due to lower inventory levels and stock outs, but the costs associated with carrying large quantities of excess or obsolete stock could be a huge financial burden if not managed properly.

4 | Decline: After a product has reached its maturity stage, sales will eventually fall due to changes in consumer demand or due to newer product offerings or competing products being supplied to the market.

Different products have different growth and decline patterns. Smart inventory planners that have already accounted for the decline in demand have typically taken a number of actions to ensure stock levels are being reduced at an appropriate level to avoid being left with obsolete stock.

Orders will diminish as contract time periods end, and suppliers must be careful not to be caught with dead and obsolete stocks of raw materials, components or finished products.

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Now that you’ve put in all of the hard work in researching, designing and testing your newly adapted product(s), you’re ready for the big payoff – time to launch them into the market and bring in the revenue!

But before you pop open the champagne, you need to make sure you stick the landing on this launch. So what do you need to do to get it right?

Read on for an outline of the steps to a successful launch, and a summary of the whole product adaptation process.

This article series explores the four general stages of product development:

1. Innovation
2. Design
3. Testing
4. Launch or commercialization

This article will focus on Stage 4: Launch or commercialization!

Organizations launching new (or adapted) products may start in a few selected markets with a small run of product, and a sales and marketing campaign that will monitor product uptake. This initial sales data can be used to determine whether to proceed with more production, to increase both domestic and foreign markets, and to expand the sales and marketing program.

Want to learn more about tailoring design considerations and policies to suit customer preferences? Check out the FITTskills Product Development online workshop!

10 Practical Steps for a Successful Product Launch

1. Start early: Begin outreach activities six to eight weeks before the official launch date to maximize opportunities for coverage.
2. Make the product available to influencers: Offer the product to existing customers, prospects or bloggers with online presence to garner early reviews and articles.
3. Brief industry analysts: Promote your product early in the process and present a compelling case for your offering.
4. Create buzz online: Use social media to generate interest with strategic “coming soon” and “sneak peek” posts along with photos or video to build interest.
5. Plan a low-key release: The official launch date could simply be when the product is available to customers, rather than a splashy launch event.
6. Have a rolling release: Publish regular content about the product, its benefits, case studies and reviews to build momentum in sales and marketing.
7. Grab their attention: During the release cycle, do something unusual that will make people talk about the product, such as a witty video, a clever infographic or a publicity stunt at an industry event.
8. Involve partners: Have your marketing team engage with stakeholders who will benefit from a successful launch (such as your distribution channel) to encourage the informal promotion of the product, and spread the word about the product release.
9. Make it easy for customers: Offer free trials, downloads, product videos and demos so consumers can learn more about the product.
10. Focus on meaningful engagement: Rather than focusing on a general social media audience, connect with the users who are talking about your product and explore how they might promote it within their social circles

The development and commercialization of totally new products is very risky, even when an unmet need is identified. It may require a significant investment of resources, but if carried out well it can also reap significant returns.

With a totally new product there is no ability to ride the success of an existing product platform. A new product is launched and initiates the very beginning of a product life cycle. All aspects of the global value chain need to be carried out, generally on a small scale, increasing in scope with the growth and success of the product.

Elements of Product Development and Adaptation Processes

There are other product development and adaptation processes that can be used. Typically, they include the following nine steps, although some variation in steps may occur depending on the organization’s products.

9 Typical Steps in Product Development and Adaptation

The emphasis and resources spent on each of these steps will depend on the characteristics of the organization, the product type and the market. Although the ability to screen out ideas will depend on the quality and nature of information collected, research is separated here as a distinct stage to highlight its importance.

Organizations should not underestimate the value of primary market research in the early stages of development and adaptation.

It is at this stage where the processes of product development and adaptation start to strongly align with the marketing function of an organization. It is through talking to potential customers that ideas for new and adapted products can start to be narrowed.

Figure 1.4 – Core Elements of Product Development and Adaptation – originally published in FITTskills Products & Services for a Global Market ebook.

Check out the rest of the product adaptation article series:

1. Innovation
2. Design
3. Testing

The post Revitalize your business through product adaptation: Stage 4 – Launch appeared first on Trade Ready.