Mastering the Product Life Cycle: Strategies for Medical Products

All medical products, devices, or pharmaceuticals go through their life cycle.  

The complete product life cycle is the period of time that begins with the development of a product or service to the withdrawal of that product from the market. 

There are several stages in the product life cycle and by understanding them, we can increase the profitability, demand, and interest for the product. 

This post covers the various stages involved in a product life cycle. It explains how we can increase profits and generate demand. 

There’s also information on life cycle analysis and understanding the environmental impact of your product throughout the different stages of its lifecycle. Let’s get started. 

The product life cycle 

The theory of the product life cycle theory was developed by Raymond Vernon in 1966 to explain the pattern of international trade and foreign direct investment.  

In product life cycle theory, Vernon defined three categories of products based on their stages in the theory and their behaviors in the market: new product, maturing product, and standardized product. 

There are four stages that Vernon determined in his theory: Introduction, Growth, Maturity, and Decline stage. This can be illustrated by looking at the sales during the time period. Let’s go over these stages together: 

Introduction:  

After developing the product this is the moment when the company launches the product into the targeted market. As the penetration is low and it takes time to shift from the existing products, sales volume, and profit margins are low. Competition normally is low, and the price is relatively high. 

To gain market acceptance and create demand, companies invest heavily in marketing and sales promotion. The growth rate of sales is slow and costs are high due to limited production. Often the product incurs loss during this stage due to high start-up costs and low sales turnover. 

Growth:  

In this stage, sales are increasing at their fastest rate creating the commercial success of the product. In this stage economies of scale occur as production and distribution are widened.  

The promotional expenditure remains high because of the need to increase penetration, differentiate from competition, and for effective distribution. In this stage sales force engagement is crucial. Profits are high on account of large-scale production and rapid sales turnover. 

Maturity:  

This stage is characterized by the highest level of sales. However, the rate of growth is slowing down for example due to higher competition or market saturation.  

Moreover, during this stage prices and profits decline due to a higher competitive pressure. Brand loyalty is a clear objective and promotion goes in this direction. If possible, at this stage companies try to modify and improve the product, to develop new uses, and to attract new customers in order to manage the maturity. 

Decline:  

This is the final stage of the cycle; sales begin to fall and eventually, the product could be withdrawn. Innovative new products are introduced and health care professional protocols might have changed. There could also be intense price-cutting pressure. Frequently profits can be maintained by reducing marketing spending and cost cutting.  

Also in this stage, the market is saturated and companies fight to retain market share or current level of sales.  

The decline may be rapid and the product may disappear from the market. However, the decline may be slow when loyal customers continue using the product or new uses of the product are created. 

Conclusion 

The product life cycle is a straightforward tool that can be used to understand and navigate the market. Consider also that every tool is not perfect and should be used together with business acumen and gut feeling to make informed decisions.   

Each stage of the product life cycle has its specific characteristics and requires appropriate strategies. In my opinion, coupled with accurate sales data, the product life cycle can be used as an explanatory tool in facilitating an understanding of past and future sales. 

In what stage is your main product? What marketing strategy are you implementing? If you need help with your medical product throughout any of the stages of the product life cycle model, send me a message.  

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