Is it Time to Re-think Your Product Development Process?
Every product manager is familiar with the classic four stage Startup | Growth | Maturity | Decline product life cycle which plots product sales against time.
Taking into account factors such as market demand, competition, technology evolution, trends, tastes and other important market factors, the product lifecycle model is used to forecast how sales of a product or product version will grow, plateau and decline over a certain timeframe – and as a result, whether to invest in new product development or ‘lifecycle extension’.
Set against this, product development managers are tasked with working on new product versions and variants while the older versions are quietly run down or phased out, with product/technical support or guarantee expiry often sounding the final death knell.
Indeed future generations of some products are designed years in advance, though not all make it out of the design stage.
Predicting the product lifecycle
A key responsibility for Product Managers and Product Development Managers is to predict a product’s lifecycle and make important decisions on whether to shorten, extend or stick to the original lifecycle plan.
This prediction requires analysis of many factors including current manufacturing output, stock movements, current sales and prospect sales enquiries vs quarterly/annual sales budgets, as well as a constant analysis of how the product is fairing against its competition.
For example, if stock levels are starting to build up, units are currently in production and sales are trending downwards, then it may be time for action on shortening the product’s lifecycle.
Meanwhile, if product is flying off the shelves, stock levels are low and sales and order books are full, it may be sign that the lifecycle could be profitably extended.
It’s a balance, however.
In an ideal world, a successful product that has been designed and developed at considerable cost should have as long a lifecycle as possible.
The product manager’s dream is to have a product development road map for future product variants, enhancements and new models in place, ready for a continuing and profitable cycle of regeneration.
Factors influencing the product lifecycle decision
The perfectly planned and realised product lifecycle cannot always be achieved. In addition to the key factors outlined above, a range of of other factors can come into play to influence the decision on extending or shortening a product’s lifecycle, or just sticking to the plan.
The factors can be summarised as a series of questions such as:
- Does the product have any flaws or faults that need to be ironed out?
These will need to be addressed in a new or updated version of the product, which in turn may require a diversion of product development resources.
- Is manufacturing yield at the required level – or is the reject rate too high?
Low or compromised manufacturing yield can seriously impact on product profitability and may need to be addressed through product changes.
- Are production/manufacturing costs under control or creeping up?
The design of any product that becomes more expensive to manufacture than its business model originally envisaged – for instance because of rising materials costs or machining and tooling costs – would need to be adjusted and evolved, or the product retired.
- How does the product stack up against competition?
Clearly strong market competition can hasten a product’s decline. Where product design doesn’t keep pace with changing competition or tastes, steps need to be taken. However by the time these differences are apparent, it may be too late.
- Is there an ancillary product or aftersales market?
If your product has an aftersales market where spares, optional items and add-on extras can create a whole product ecosystem, it’s worth extending the product lifecycle.
Obvious examples here include the iPad keyboard, Apple Pencil and Apple Watch, all of which allowed increase function and usability. Other than the software interfaces, the hardware development was independent from the existing iPhone/iPad product ranges.
- Is the product being overtaken by technology e.g. does it need to be IoT capable?
This is possibly one of the greatest factors affecting product lifecycles. If the roadmap does not incorporate transformation or evolution to new technology paradigms, the decision about lifecycle extension, decline or retirement is potentially the trickiest of all.
For example, the demand for a fax machine in every office began to fall with the advent of email. Was there a need to develop new and better fax machines or to extend the lifecycle of current models as far as possible? Or to adapt and evolve in other ways?
Product lifecycle extension options
If no product family or improvement roadmap has been established, and you are in the life cycle phase where, because of any of the factors above, your product development process needs to adapt, consider the following options.
- Overhaul the existing product
Examples of an existing product overhaul include simple rebranding, changing the aesthetics or repackaging to suit new trends, but not “fixing what isn’t broken”.
It’s about refreshing your product to meet new trends and changing customer tastes. Examples include the evolution from Apple iPhone3 to iPhone4 which brought a distinct new design feel to the product. The release of iPhone 4 did bring many small enhancements, but it was mainly focussed around the design refresh.
2. Include new features
Similarly, adding new features or functions to a product is a good way to extend that product’s lifecyle.
New features that can enhance usability or deliver an additional benefit go further than the more straightforward and largely cosmetic overhaul described in (1).
3. Introduce a complementary product
Launching a secondary product to complement the original, existing product is an excellent way to extend a product lifecycle.
For example, Ford Motor Company added the Kuga SUV to complement their Fiesta hatchback, Mustang GT and Mondeo family saloon range. Apple did the same with iPods with the Classic, Nano and Shuffle.
4. Product replacement
Product replacement maybe planned years ahead where it is known that certain products will go end of life or for various reasons will need to cease production.
A great example using Ford is the replacement of all diesel and petrol engines with electric propulsion, which in most cases requires the design and development of a completely new vehicle.
It is not always possible to plan for every eventuality with a product lifecycle. External market, global or product factors can disrupt even the best laid plan – as we’ve seen with COVID pandemic in 2020-21.
A simple solution is to introduce a good quality, robust, entry level product using a cost effective and relatively speedy product design and development process.
In this way, a product design partner, such as Cambridge Design Technology, can help you ensure that all steps to accommodate 2nd or 3rd generation products – and beyond – are taken into account for future introduction.
Further, this allows you to validate market acceptance of your initial product, generate income streams from it, and then invest in 2nd and 3rd generation releases as you track the first generation life cycle.
Feeling inspired? For more information about how we can work with you on your next product design project, please call Jon Plumb now on 01787 377106. Or email email@example.com