{"id":69499,"date":"2022-06-17T11:20:00","date_gmt":"2022-06-17T15:20:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=69499"},"modified":"2022-06-24T11:52:52","modified_gmt":"2022-06-24T15:52:52","slug":"growth-stage-of-the-product-life-cycle","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/growth-stage-of-the-product-life-cycle\/","title":{"rendered":"The Growth Stage of the Product Life Cycle"},"content":{"rendered":"\n

What is the growth stage of the product life cycle? What happens during this stage?<\/p>\n\n\n\n

The second stage of the product life cycle is the growth stage. As William M. Luther <\/em>says in his book The Marketing Plan<\/em>, it’s when a product experiences high demand and sales increase.<\/p>\n\n\n\n

Find out more about the product growth stage below.<\/p>\n\n\n\n\n\n\n\n

Growing Your Sales<\/strong><\/h2>\n\n\n\n

What happens during the growth stage of the product life cycle? Once a product or service gains enough traction, it benefits from growing consumer demand\u2014thus, the market size increases. As a result, businesses increase production and the commodity becomes more widely available. Luther argues that companies that wait to enter the market until it\u2019s experiencing a growth rate of five to 25% a year benefit from fewer risks\u2014they save money on research and development because they just need to copy or improve upon the existing commodity. <\/p>\n\n\n\n

(Shortform note: Luther suggests that the best time to enter a market is when it\u2019s at a growth rate of five to 25% per year, but he doesn\u2019t elaborate on how to figure out whether your desired market falls within this range. Business experts clarify how to determine the growth rate of a market<\/a>: First, find the market size for at least two successive time periods\u2014for example, year one and year two. Subtract the market size for year one from year two. Then, divide the result by the market size for year one and multiply by 100 to convert the result to a percentage. For example, if the market size was 100,000 in year one, and 125,000 in year two, you would calculate the growth rate as follows: (125,000 – 100,000) \u00f7 125,000 x 100 = 20%.)<\/p>\n\n\n\n

However, by this time, customers are already familiar with the businesses that introduced the original commodity. Therefore, Luther argues that businesses entering at this stage can only gain market share by taking customers away from existing competitors. This requires a heavy investment in branding, advertising, and sales.<\/p>\n\n\n\n

Latecomers Build Market Share by Appealing to New Customer Groups<\/strong><\/h3>\n\n\n\n

Marketing experts clarify why entering the market at the growth stage requires a heavy investment in branding, advertising, and sales. Once the market moves to the early growth stage, instead of building awareness<\/a> to create demand<\/a>, businesses need to convince consumers that their product or service is superior to all other offers in the market<\/a>. <\/p>\n\n\n\n

However, as previously discussed, businesses have a hard time achieving this once consumers begin to associate brand names with products\u2014even if latecomers manage to produce a superior product, consumers will still regard them as inferior to the brand names they\u2019re already familiar with<\/a>.<\/p>\n\n\n\n

Therefore, instead of trying to steal customers away from existing competitors to build market share, new entrants should focus on appealing to customer groups that have not yet purchased a version of the product<\/a>. Common ways to achieve this include:<\/p>\n\n\n\n