What is Walmart's product lifecycle

6 phases of the product life cycle

How do you get the maximum profit with a PIM system?

The product life cycle is a concept used by marketers to describe the stages of a product in the market, from concept creation to product degeneration. In this way, changes in demand, profit, costs and changes in competitiveness are foreseen. This makes it possible to develop an optimal strategy for market behavior.

phase

aim

Profit

Sales

consumer

expenditure

concept

Find a commercially successful ideaNoNoNoLow

development

Creation of a series modelNoNoNoHigh

introduction

Investigation of demand, feedbackLowNot greatInnovatorsHigh

growth

Conquering the marketHighMean and keep growingSuccessor to the innovators and early majorityMedium?

Maturity

Get the most out of the marketHighMaximummajorityLow

degeneration

Leave the market in good time, bring a new product onto the marketLowLow and go back drasticallyBackwardLow and goes back drastically

Description and working principles of a PIM system

What's this?

A PIM system (abbreviation for “Product Information Management”) is software for the centralized and synchronous management of product information in real time. The data correspond to the established standards and formats and the product data is not contradictory and is easy to read.

How does a PIM work?

PIM systems work as follows:

  1. A uniform database is created and all product information is entered from various sources (ERP, Excel, PLM, etc.). The product information can be entered by various employees who deal with the products in all phases of their life cycle.
  2. The information collected is automatically or manually structured, categorized, improved and completed, translated into different languages ​​and related to relevant materials.
  3. After the creation of qualitative product information, it is published for further use through various sales channels: print catalogs, Amazon or Ebay, online shops, mobile applications, etc.

The main task of the PIM systems is therefore not to work with the product itself, but to work on the product information. This makes the PIM software a good support for product support in its life cycle.

6 phases of the product life cycle

Concept creation

description

In the first phase of the product life cycle, opportunities for new product developments are sought by the company developing new ideas. Sources of these ideas can be consumers, partners and internal employees. The best ideas are analyzed from a commercial and technical point of view, and based on these analyzes, the company selects one or some ideas to implement.

Main features:

  • the lack of profit;
  • relatively low cost;
  • purely mental work and paperwork.

How can a PIM system help?

Even in the phase of creating the product concept, it is advisable to think about which product information can be important and which technical data should describe this product. What are the advantages of this product and how will it differ from other products? It is also advisable to start working on the product descriptions early on. This saves a lot of time because the product is prepared ahead of time for market launch. The creation of high-quality marketing texts is very time-consuming and, thanks to a PIM solution, can be well prepared because a lot of product information can be collected and saved in the PIM system.

Product development

description

Many people refer to this phase as product development or the “valley of death”. Since the development phase incurs large costs for the company, but there are no guarantees of the return of the invested funds. Studies have shown that only one out of four products achieves commercial success.

The development process usually includes the MVP development (minimally viable product) and its verification in the realistic situation, result evaluation and improvements of the MVP. The development is ended when the testing of the product's performance and the customer reviews show that there is a willingness that the product is really in demand.

Main features:

  • great need for manpower, production capacities and time;
  • severe decline in the company's liquidity;
  • the product is presented on the market for the first time;
  • enormous cost.

How can a PIM system help?

During the product development phase, you also have to work on qualitative product descriptions in parallel in order not to spend time on them when the product is ready to be launched on the market. Rapid development and market launch of new products (NPI - New Product Introduction) ensure a great competitive advantage for manufacturers. And this is exactly where a PIM can help. A PIM system makes it possible not only to start work on the product descriptions early, but also to save time in the preparation of the qualitative product descriptions and their translations and to publish the prepared information quickly on various channels.

In a PIM, all of your product data, which is required for the introduction of the products, is stored in a single place. In addition, all important information that was created during product development, such as drawings, 3D models, product photos of prototypes, etc., can be stored in a PIM system such as in a repository.

Launch

description

First, the product is sold to a small number of specially selected customers. As a rule, these are the people who try out new products, who have already pre-ordered products and those who absolutely want to be the first to have a new product. If these customers give positive reviews, the company expands its sales channels.

Main features:

  • the product must be aggressively marketed;
  • low profit and trading volume;
  • weak competition;
  • high costs.

How can a PIM system help?

During the market launch of the product, the marketing must be carried out at short notice and simultaneously through all possible channels - through print catalogs, wholesalers, portals, online shops (own and online shops of the partners), websites, web applications, etc. A PIM system not only helps through the standardized information to disseminate the necessary channels. It also makes it possible to increase the number of these channels without increasing their maintenance costs. If the sales channels are connected to a PIM system, the synchronization and updating of the product data will take place in a very short time. This means that error correction will also take less time than without a PIM solution.

Growth phase

description

Information about new products will go by word of mouth among consumers. Everyone wants to try out the novelty, tell friends about it and post the selfie on the networks. Competitors come onto the market with better attributes and lower prices.

Main features:

  • consumers know the product well;
  • great dynamism of sales growth and profit growth;
  • Increasing competition;
  • the product is significantly improved;
  • Lower prices due to increased production volume and increased competition.

How can a PIM system help?

Practice shows that large companies that have introduced a PIM system have increased their turnover to 25 percent annually. The reason is that new sales channels can be easily connected to the PIM system and maintained. With a PIM, manufacturers who use a PIM system can create more complete and precise product information than those who use conventional traffic channels, because central information can be updated and supplemented more than once with a PIM system than without one. And it is already known that the customer is more likely to buy the product with a detailed and qualitative description.

Maturity phase

description

During this phase, sales are still increasing, but more slowly. Price wars arise, improvements always cost more and bring less profit. Customers are not won over by novelty, but with the help of price reductions, credits and diversification of the product.

Main features:

  • the market is saturated, profits are falling;
  • the peaks of sales have been reached;
  • maximum competition;
  • great reduction in product cost;

How can a PIM system help?

Completeness, usability, accuracy and timeliness of the provision of information about products, special offers, discounts and bonus programs increase consumer confidence, which also increases their loyalty. Especially in this phase, the quality of the product descriptions is the decision criterion for the purchase. This criterion becomes particularly important in a highly competitive environment.

Degeneration phase

description

Slump in demand and profits. Market appearance of technically higher quality innovations and replacement products that customers prefer more than old products. Most competitors go bankrupt or leave the market. The product demand disappears completely or sinks to a very low level. In the latter case, the product becomes a fetish for a small group, e.g. blacksmithing or the sale and repair of gramophones and gramophone records.

Main features:

  • product costs slide below breakeven point;
  • large productions are stopped;
  • the competitors are leaving the market en masse.

How can a PIM system help?

As an example, consider the Procter & Gamble and Walmart. After the PIM software was introduced in this company, it showed that there were 3.7 percent and 2.5 percent obsolete products in the catalogs of these companies (which appeared in the catalogs but were not purchased). With a PIM system, the company can keep its range up-to-date and maintain product catalogs, and can also use a large amount of the product information collected for the following activities:

  • the search for consumer patterns;
  • Increasing the effectiveness of all aspects of sales;
  • Generating ideas for entering the market with a new product.

Summary

The product life cycle concept is a forecasting model that helps marketers work out the optimal strategy of market behavior to get the maximum profit and understand when to take the old product out of sale and introduce the new one. PIM systems are designed to automate work with information, which allows your employees to be relieved of routine work and the number of errors to be reduced. The use of PIM software (e.g. AtroPIM) not only helps companies to save labor costs, but also to increase sales through better quality of product information and its timely publication to the target group.