The Product Life Cycle

Understanding the product life cycle is key to understanding how to market a product. Many marketing campaigns are won and lost because of knowledge of the product life cycle. If understood, the product life cycle will tell you how to market a product and how much money to spend.
The product life cycle is divided into four parts; introduction, growth, maturity, and decline. These parts of the cycle follow a the curve you would normally expect, a long slow initial acceptance, a period of rapid growth, a long length of time where the product has fully saturated the market, and its eventual decline in obsolescence.
The introduction phase of the product life cycle is the easiest to market, but the most resource and cost intensive. The target market is the early adopter. The problem is the early adopter is the most difficult consumer to convince. The early adopter seeks status. They crave new products, not because of usefulness, but sexiness. They want to feel this product they are buying into will bring them some amount of prestige among their constituents.
The question then is, how do you market to them? Ad and event intensive sales are probably the most useful. Ads should focus less on the feature-benefits and more on the emotional aspect of the product. One company that makes this distinction very clear in their advertisements is Apple Computers. When advertising for their personal computing products, they use the PC vs. Mac ads. These ads are entertaining and grab your attention, but focus mainly on the feature-benefit aspects of a product. The iPhone ads are very low on feature-benefits and high on the coolness factor.
Growth is the period when everyone knows your product, but they aren't sure if they want to use it or not. Here it is important to stop focusing on the coolness of a product, and start focusing on the features and benefits of a product. At this point, the early adopters have shown the world how cool the product is and how cool they are for having one. The rest of you market wants to know why it is they should get one. If they don't see a real benefit, then they will move on to the next product.
Maturity is the least expensive segment of a product's life cycle. When a product has generally been accepted, and the market has reached its final penetration, it has reached this point. Your marketing techniques should focus on maintaining customers and customer satisfaction. Your advertisements can focus on what you can do for them while they keep using you product.
Decline is the most difficult segment for most companies. Decline requires a lot of soul searching. If a company continues in the status quo, the product will decline and the company will continue to spend money on it. This is the recipe for disaster. A company has one of two paths it can take. Either, you can rebuild the product, or you must discontinue the product.
If the company wishes to revitalize a product, it usually does so in one of two ways. The first is nostalgia marketing. You remind the consumer about the product and that it was always there. The second, is to refresh the product. You can create new promotional material, new packaging, new advertising or new features.
The process of rebuilding a product's market is often not feasible because of obsolescence. If this is the case, the company shouldn't just discontinue the product and leave the customer hanging. A well designed marketing plan should inform customers of the end of the products life cycle, and move them onto another of the companies replacement products.