Product Life Cycle Management Guide: The 4 Stages, Explained
Product life cycle management (PLM) exists because product managers, start-up founders, and business owners know that few jobs are as challenging as product management.
And no wonder: the statistics on new product launches are pretty dire. Somewhere between 80% to 95% of new product launches fail!
Those are some scary numbers. So, what's the key to managing the product life cycle effectively from launch to decline, and which product lifecycle management tools can help you do it?
PLM guides product success: Product Life Cycle Management (PLM) helps navigate a product from launch to decline.
Most products fail: 80–95% of new product launches don’t succeed, making PLM crucial.
PLM tools reduce risk: Using PLM software improves decision-making and minimizes failure risks.
Strategic planning matters: Managing each stage properly maximizes market success and product longevity.
What Is Product Life Cycle Management?
Product Life Cycle Management (PLM) is a framework for managing a product from launch to decline. It includes planning, marketing, development, and optimization to maximize success.
Companies use PLM to streamline operations, improve profitability, and align product strategies with market demand. PLM software tools assist in managing product data, ensuring smooth collaboration across teams.
Today, several software companies offer specialized PLM software products and solutions that help product managers make decisions about processes like pricing and marketing strategy. A few tools that product managers can use to support PLM include:
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Wrike
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.2 -
Jira Service Management
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New Relic
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.3
PLM is now synonymous with the PLM software systems that help manage the product life cycle.
The Difference Between The Product Life Cycle And The Project Life Cycle
There is often confusion about the difference between the product life cycle and the project life cycle. I’ll attempt to clear some of the confusion around this topic:
- A project is defined as an endeavor undertaken to create a service, product, or result. The project life cycle has a definite beginning and end with a clearly defined scope and resources.
- The objectives of the project life cycle and the product life cycle are quite different. A project is used to achieve a pre-defined outcome that may or may not be a product.
- The product life cycle may use many projects to achieve its goals, but the reverse is usually not true.
The Stages Of The Traditional Product Life Cycle
The product life cycle (PLC) describes the four key stages a product goes through, from launch to market exit. Managing these stages effectively helps maximize product success and profitability.
The four traditional stages of the product life cycle are:
- Introduction: Launching the product and generating awareness.
- Growth: Expanding market share and increasing demand.
- Maturity: Sustaining sales while optimizing profitability.
- Decline: Managing reduced demand and planning product exit strategies.
While some models expand to five or six stages, this guide focuses on the four-stage traditional PLC model used in most industries.
Product Life Cycle Phase 1: Introduction Stage
The Introduction Stage begins when a product is launched.
At this stage, profitability is low due to high marketing, distribution, and development costs. The focus is on building awareness, attracting early adopters, and refining the product-market fit.
Sales start slowly, as most customers are unfamiliar with the product. Early adopters, who are eager to try new innovations, help drive initial traction. However, demand is uncertain, and competition may arise quickly.
As a product manager, your priorities include:**
- Creating market awareness through marketing, PR, and promotions.
- Monitoring customer feedback to refine messaging and features.
- Positioning against competitors to capture market share early.
Success in this phase depends on strong marketing, product differentiation, and quickly adapting to customer insights.
Product Life Cycle Phase 2: Growth Stage
The Growth Stage is where demand increases, sales accelerate, and the product gains broader market adoption. With rising revenue, companies focus on expanding market share, optimizing pricing, and improving distribution.
However, rapid growth brings challenges. Scaling production, maintaining quality, and managing supply chain logistics become critical. A failure to meet demand can lead to lost sales and frustrated customers.
As a product manager, your focus in this stage should be to:**
- Expand market share through aggressive marketing and sales efforts.
- Ensure production meets demand to avoid shortages or delays.
- Monitor competition and adjust pricing, features, or positioning accordingly.
Success in this phase requires balancing rapid expansion with operational stability while staying ahead of competitors.
Product Life Cycle Phase 3: Maturity Stage
The Maturity Stage is when sales stabilize, market saturation increases, and competition intensifies. This is often the longest phase of a product’s life cycle, where businesses focus on maximizing profitability and extending the product’s relevance.
At this stage, differentiation becomes crucial. Companies refine marketing strategies, enhance product features, and may introduce new variations to attract different customer segments.
However, launching variants risks cannibalizing existing sales, making strategic positioning essential.
As a product manager, your focus should be to:**
- Maximize profitability by optimizing costs and efficiency.
- Extend product lifespan through differentiation or market expansion.
- Monitor competitors and adjust pricing or positioning accordingly.
Sustaining success in this phase requires continuous adaptation to shifting market demands while maintaining profitability.
Product Life Cycle Phase 4: Decline Stage
The Decline Stage begins when sales drop due to market saturation, changing technology, or shifting consumer preferences. Even market-leading products eventually face decline.
At this stage, companies must decide whether to extend the product’s life or phase it out. Strategies include:**
- Repositioning: Expanding into new markets or targeting different segments.
- Product Updates: Adding features or improvements to sustain interest.
- Gradual Exit: Reducing prices, clearing inventory, and discontinuing the product.
Managing end-of-life products can be costly. To ease the transition, businesses may encourage customers to upgrade by offering discounts on newer versions.
As a product manager, your role is to:**
- Assess whether to pivot, refresh, or discontinue the product.
- Optimize exit strategies to minimize losses and maintain brand reputation.
- Encourage customer upgrades to newer products when possible.
Successfully handling the decline phase ensures minimal disruption while keeping long-term business goals in focus.
The Importance Of Managing The Product Life Cycle
Building a product from scratch or handling a fledgling product may be super tough, but (surprise, surprise!) managing an established product isn’t any easier.
This is why Agile product life cycle management methodologies like The Lean Startup by Eric Ries is widely considered one of the most essential books for product managers. These Agile product life cycle management philosophies attempt to move the needle towards the science side of the art vs science product success spectrum.
Having a deep understanding of the various stages of the product life cycle is important when it comes to developing new products. Knowing the stages helps in determining the feasibility and viability of a new product.
You will be better able to answer these questions:
- Is it worth building this product?
- Will it survive in the market?
- If it does survive, when can we expect to make money off of it?
Typically, in an Agile product life cycle, a product manager can run a series of small experiments to get answers to these questions. Here are some reasons why the product life cycle is important.
Related Read: Importance of Product Management
Estimation, Planning, And Forecasting
Once you’ve decided that a product is feasible and that it is worth going ahead with, then comes the next stage: product planning and forecasting. This is where in-depth knowledge of the product life cycle can assist in making plans and preparing forecasts for revenue, margins, market size, and customer base.
There is a school of thought that says that all this planning is in vain since no one has a clue about whether a product will succeed. However, the very act of working on a product roadmap by planning, estimation, and forecasting forces a product manager to think hard, ask difficult questions, and examine hidden assumptions that are unaddressed. Forewarned is forearmed.
Additionally, I don’t know of a single executive leadership team in any organization that has approved large product budgets relying only on the product manager’s say-so and hunches, so it is a necessary exercise anyway.
Personally, I always prefer an appointment with my dentist to a budget approval process, but if you come across such an executive team, be sure to let me know! I’ve taken a large sip of my elixir of immortality, just in case.
Marketing Planning And Approach
Different stages of the product life cycle require specific marketing approaches. For instance, in the introduction phase, customers have no clue about the product, so marketing needs to introduce the product to potential customers and educate them about its benefits.
During the maturity phase of the product, marketing primarily relies on product differentiation to promote sales. When products approach end-of-life, discounts and rebates are often offered which attract customers who would not otherwise have bought that product.
Related Read: 10 Best Product Marketing Tools For Your Marketing Strategy [2025]
Communication Between Teams
Product management requires a multidisciplinary approach including design, engineering, marketing, sales, and support just to name a few. Working with multiple teams invariably brings about the challenge of communication and coordination.
The benefit of the product management life cycle is that it allows all teams to work with a unified paradigm so that it is easier to coordinate for success.
If the team can’t see the full vision… then a lot of times it’ll get missed as far as how that interaction is supposed to be. And so I’ve found it’s really helpful to keep all of the product information in one place.
Concurrent Product Development
All products reach the end-of-life phase. Therefore, it is important for companies to have a pipeline of concurrent products to ensure that they maintain or increase levels of revenue and market share.
At the same time, it is important to ensure that new products do not cannibalize existing ones. The product management life cycle helps to synchronize product development to optimize the life of each product in its product portfolio.
Integrating Your PLM System With The Rest Of Your Business
No PLM software can operate in isolation, in a silo. While a PLM system is perhaps the keystone of a product company, the other pillars — enterprise resource planning (ERP), customer relationship management (CRM), computer-aided design (CAD), supply chain, communications, and storage infrastructure — need to be tightly integrated with the PLM system to make it a globally optimal system.
To take a simple example, even if your PLM system is top-notch, if it is not integrated with your suppliers and ERP, it will be hard to get the product to market on time.
Likewise, without a solid CRM system in place, it will be hard to provide the kind of service levels that get customers to recommend your product. Bad word-of-mouth can deep-six a product faster than you can say customer relationship management.
The details of how to integrate multiple complex systems like PLM, ERP, and CRM requires several books worth of content so we will only discuss an overview:
SCENARIO 1: You already own systems like ERP and CRM from different vendors with different platforms like Windows or Linux. Even if you're happy with each system, getting them together can sometimes be like trying to herd cats. Your best bet here is to get a good systems integrator to get all these systems to talk to each other.
SCENARIO 2: You're a successful start-up growing rapidly and have a green field in front of you. There is an opportunity to start on the right foot and save a ton of headache down the line by ensuring that the parts you set up fit well like a jigsaw puzzle. Typically market-leading products (ERP, CRM, etc.) in each category will be from different vendors so there are difficult decisions and trade-offs to be considered. Is interoperability more important than functionality?
The long and the short of it is that integrating these large, complex, and diverse software systems is difficult and there is no “one-size-fits-all” approach or solution. Even the best industry standards may not be a good fit for your specific organizational scenario. Keep your eyes open and ask a lot of tough questions.
The History Of Product Life Cycle Management
PLM originated in the 1980s when American Motors Corporation (AMC) sought a competitive edge against larger rivals like Ford and General Motors. Their approach laid the foundation for modern PLM systems:
The smart folks at the AMC took the following approach:
- Focused their R&D efforts on enhancing the lives of their existing best selling products that were in the maturity phase of the life cycle
- Used computer-aided design (CAD) to speed up product design and development efforts
- Stored all product data and designs centrally (in a PLM software system), allowing for quicker communication, version management, and conflict resolution
You may be thinking — BIG DEAL, my 10-year-old kid can do all this! Your thinking would be correct — today. In 1985, however, all this was bordering on the revolutionary. Remember, it was a time of spandex, hair bands, and boxy computers that filled small rooms and cost tons of money. Personally, I’m ambivalent about sports utility vehicles, but I love Van Halen and Def Leppard — the pre-eminent bands of that era IMO — so it evens out.
The result of all this effort was great for AMC as they ended up kicking competitor butt-er-flies.
They launched new variants of Jeep, created a new market segment for vehicles called sports utility vehicles (SUVs), and finally got bought out by Chrysler who used these new techniques to reduce their development cost structure to 50% of that of the competition. 50% reduction is insane by any standards.
Still, the red queen rules supreme. Toyota came along later and ate everyone’s lunch, and today Elon Musk’s Tesla seems to be the king, with a larger market cap than that of the 6 largest car companies combined!
Life After Product Life Cycle Management
Like the proverbial product cycle that keeps going, thanks to an overlap between mature products and those in development, a product manager’s job is never done. PLM and the product life cycle are a necessary part of a product manager’s toolkit, especially since they help generate a semblance of order out of the chaos of the market.
What has your experience been with PLM systems and processes? What is your opinion of the utility of the product life cycle? In what way did it help you? Let me know in the comments below!
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Check This Out: An Updated Approach To The Product Life Cycle
