Winning products are those that have a minimum life cycle at least one minute longer than the payback period and ideally one minute longer than your own lifespan.
There are four stages of a product life cycle:
- 1. Product Introduction
2. Growth (Sales Increase)
3. Maturity (Sales Level Off)
4. Decline (Sales Taper Down)
-
There are fad items which are here today and gone tomorrow, but there are also extended life products. I define the extended life items as those that can be sold in quantities for more than five years.
A short product life cycle is not necessarily negative. Some products have very short but very lucrative life cycles. George Coakley, who helped market the Pet Rock can attest to that. Their revenue graph looked like a pyramid. Straight up one side and straight down the other. The payoff was that when it reached the top, it was in the millions of dollars. When it was over, they had only a few rocks left. The had no excess inventory! The ideal fad product!
Each product has a unique life cycle, which calls for a different marketing, promotional, and funding strategy. With some products, EACH STAGE of its life cycle calls for different strategies.
Naturally, any innovations you can add to your product that improve its performance or increase its benefits will add to its life cycle. Just think of all the times you have seen NEW, Improved..." on a product's packaging. Those are attempts to extend a product's life cycle, by getting you to try it again, even if you are tired of the product. If a product has no competition, the developer may want to introduce it with less features than originally intended, in order to be able to extend its life cycle by incorporating the additional features at a late date and reintroducing the product. This is especially enticing if the product will experience strong sales without the additional features, and if the features can be added at a later date without costly tooling changes.
On a fad item, you should expect to invest the majority of your money in a short well-focused, aggressive advertising campaign meant to prompt an immediate purchase and rapid distribution of the product. The manufacturing and facility investments should be minimized and the use of outside contract manufacturers maximized.
On an extended life product, the strategy may be reversed and the majority of money would be spent on a facility and equipment to produce the product. The advertising program would then be long term, more technical, more informative, and aimed at building a long-term relationship with the customer. In industry terms, this is "building brand name loyalty."
It's important to estimate your product's life cycle as accurately as possible. Be objective!
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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