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Shapping Brand Value Over Its Lifecycle

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Engr Mohammad Al-Amin

Brands and products typically go through five stages in their life cycle: 1) development, where the product concept is conceived and tested; 2) introduction, where companies heavily advertise and promote their new brands at high prices; 3) growth, where sales start growing exponentially as distribution expands and competitors enter; 4) maturity, where competition becomes fierce and companies must differentiate their brands; and 5) decline, where sales start to fall and brands must be extended to new markets or uses or discontinued.

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Shapping Brand Value Over Its Lifecycle

Uploaded by

Engr Mohammad Al-Amin
24 views2 pages
Brands and products typically go through five stages in their life cycle: 1) development, where the product concept is conceived and tested; 2) introduction, where companies heavily advertise and promote their new brands at high prices; 3) growth, where sales start growing exponentially as distribution expands and competitors enter; 4) maturity, where competition becomes fierce and companies must differentiate their brands; and 5) decline, where sales start to fall and brands must be extended to new markets or uses or discontinued.

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Brands and products typically go through five stages in their life cycle: 1) development, where the product concept is conceived and tested; 2) introduction, where companies heavily advertise and promote their new brands at high prices; 3) growth, where sales start growing exponentially as distribution expands and competitors enter; 4) maturity, where competition becomes fierce and companies must differentiate their brands; and 5) decline, where sales start to fall and brands must be extended to new markets or uses or discontinued.

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© All Rights Reserved
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
24 views2 pages

Shapping Brand Value Over Its Lifecycle

Uploaded by

Engr Mohammad Al-Amin
Brands and products typically go through five stages in their life cycle: 1) development, where the product concept is conceived and tested; 2) introduction, where companies heavily advertise and promote their new brands at high prices; 3) growth, where sales start growing exponentially as distribution expands and competitors enter; 4) maturity, where competition becomes fierce and companies must differentiate their brands; and 5) decline, where sales start to fall and brands must be extended to new markets or uses or discontinued.

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Brands & Product Life Cycle

All product categories have a specific life span called the product life cycle . The product life
cycle can pertain to unnamed products as well as those associated with a specific brand
name. Many factors, such as competition and technology, affect brands and their product life
cycle. Nevertheless, brands or products typically go through five stages of growth:
development, introduction, growth, maturity and decline.

The Development Stage

Technically, the development stage is the "incubation stage" of a brand's product life
cycle, according to the article titled "The Product Life Cycle" at NetMBA.com. The
development stage is where the product concept is conceived, developed, branded
and even tested before being introduced to the market.

Significant capital typically goes into the development stage, including product and
advertising costs. It is certainly conceivable that a poor concept idea or the lack of
capital could end the life of a brand before it is introduced.

The Introduction Stage

A brand life cycle actually commences in the public's eye during the introduction
stage. During the introduction stage, companies heavily advertise their brands and
products; and execute trade show and in-store promotions for potential wholesale and
retail customers, respectively.

Company advertising is mainly focused on building brand awareness. Companies


usually price their brands relatively high during the introduction stage to recoup some
of their development costs. Competition is low or non-existent during this stage. Thus,
a successful brand concept will usually elicit heavy sales and propel the brand toward
the growth stage.

The Growth Stage

Brands enter the growth stage of the product life cycle when sales start growing
exponentially. Brand managers may increase distribution during the growth stage to
further enhance sales, according to netmba.com. A company may also improve the
quality of their product brands, adding various flavors or features. Because of the
success of one or more companies, more competitors will enter the market with their
own brands. Consequently, some competitors may try to lower prices to gain
marketing share.

The Maturity Stage

Because of increased competition, a company's brands will eventually reach the


maturity stage of the product life cycle. During brand maturity, competition for market
share may be fierce. New competitors will often have trouble successfully entering the
market as market potential is limited.

A company will often need to differentiate the brand of products toward a specific
segment. For example, the company that first entered the market may focus on being
the quality leader. The company may keep prices relatively higher to maintain its
premium image. The target market may include older users with a higher household
income.

The Decline Stage

The decline stage is where sales start to fall for a company's product brands. At this
point, it is still possible to extend the life of the product by finding new markets for the
brand like international markets; or even finding additional uses by repositioning the
brand.

For example, a small detergent manufacturer may extend the life of the brand by
selling to emerging markets, such as India. The company could also potentially extend
the life of the brand by marketing the detergent in car washes, hotels, schools and
even hospitals. Ultimately, a brand may need to be sold or gradually discontinued if it
is no longer profitable.

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