Product Development Life Cycle: What It Is & Why You Should Care

14 min read
Product Development Life Cycle: What It Is & Why You Should Care 0

Everything goes in cycles in this life.

Everything comes to life and everything ceases to exist.

The same goes for digital products. Every product goes through a software development life cycle – from idea generation to the product’s success and decline.

This article breaks down the concept of the product development life cycle and its main stages, while explaining how to identify the stage of your product.                 

A few points covered in the article;

  • What is the life cycle of product development?
  • What are the main stages of a software development life cycle?
  • How can you identify the stage of your product?
  • What can disrupt the product development life cycle?
  • Real product development life cycle examples 



What is the Product Development Life Cycle?

The Product Development Life Cycle (PDLC) is the process of a product going through all the stages of existence – from idea to product development and the time when the product ceases to exist.               

Software Development Life Cycle: 7 Key Stages

Product Development Life Cycle: What It Is & Why You Should Care 1              

Usually, seven product development life cycle stages are distinguished:

  1. New product development
  2. Introduction
  3. Growth
  4. Maturity
  5. Saturation
  6. Decline
  7. Afterlife

The first stage involves design, development and launch of a new digital product. Growth, maturity and decline are stages connected with the management of existing products.

Let’s take a look at the processes involved in each stage of the product development life cycle.              

Stage 1: New product development

Product Development Life Cycle: What It Is & Why You Should Care 2             
Team: stakeholders, business analysts, marketers, developers             
Purpose: the creation of a valuable and working product             
Exit criteria: the product is ready to enter the market             
Challenges: colossal time, money and human resources             

A lot of processes are involved to bring a new product to the market.

New product development involves idea generation, market and competitive research, idea testing with a focus group and stakeholders, concept development, etc.

The development stage of the product life cycle can take a considerable amount of time, money and human resources. The creation of a working product that satisfies specific customer needs and meets business requirements is the primary purpose of this stage.             

Product Development Life Cycle: What It Is & Why You Should Care 3             
During this stage, companies are working on brand awareness and creating a buzz on the market.

Since the development of a new product involves significant investments and efforts, it’s often considered apart from the rest of the product development life cycle. Still, this stage has a direct impact on other stages. New product development is just the first step of a long, bumpy road.             

Stage 2: Introduction             

Product Development Life Cycle: What It Is & Why You Should Care 4            
Team: marketing and sales team            
Purpose: building demand and customer base            
Exit criteria: customer base starts to grow            
Challenges: low sales, raw market

Introduction is the second stage of the product development life cycle when a product is first launched to the market. The stage requires the involvement of a marketing team to build product awareness and find the first customers or users. When done right, the buzz created during the previous stage will help you get the first customers and even form a base of devoted fans. Still, you can’t expect to have high sales and demand.            

The introduction stage focuses on marketing campaigns and advertising. At the same time, it’s an important phase when you need to decide on product pricing, how you’re going to promote your products and get more customers. You’ll be preparing for the next important stage – growth.            

Stage 3: Growth

Product Development Life Cycle: What It Is & Why You Should Care 5           
Team: growth marketers, developers           
Purpose: establishing the brand and gaining market share           
Exit criteria: the demand and profits are growing at a rapid pace           
Challenges: increasing competition

Growth is the most exciting stage of the software development life cycle. At the same time, it’s quite challenging as the future of your products depends on it.

During the growth stage, the market has already accepted your product and customers are actively starting to join it. The main goal is to bring demand and profit growth to a rapid and steady pace. You’ll need to advertise your digital product, explore new audiences and new marketing channels.

Together with rapid growth, businesses usually get growing competition. Competitors begin noticing your success and want to get a part of it.

The growth stage is a great time to apply the best growth marketing strategies to retain market share and oppose the growing competition.           

Stage 4: Maturity

Product Development Life Cycle: What It Is & Why You Should Care 6          
Team: marketing team, developers, stakeholders          
Purpose: maintaining the market share, outperforming the competition          
Exit criteria: the profit and sales start to level off          
Challenges: increasing competition, the need to innovate to stay competitive

The maturity stage is when you gradually move from rapid growth to stable sales. Marketing efforts are focused on differentiating your product rather than building awareness.

At this stage, your competitors are already in the growth stage. The competition becomes quite tough, so you need to reduce prices, enhance features and promote your product more intensely to stay competitive.

The highest margins often accompany the maturity stage. You don’t need to invest that much money in product development, sales are increasing and you make a lot of money.          

Stage 5: Saturation

Product Development Life Cycle: What It Is & Why You Should Care 7

Team: growth marketers, developers, stakeholders         
Purpose: keeping the market share, making your product a brand preference         
Exit criteria: the sales are starting to fall         
Challenges: strong competition, fewer competitive advantages

Product saturation stage is characterized by neither growth nor decline in sales, app installations or software signups. At this stage, competitors have begun to eat away a portion of your market, offering products that attract customers.

Take a look at your product and identify any areas of improvement. If product-level innovations are impossible, you can differentiate your digital product in terms of price,

The possible tactics include making your product different in terms of features, brand awareness, price, and customer service. Sometimes, product-level innovations are impossible. In this case, try to come up with ideas to differentiate with customer service to get customers’ love and testimonials to use in marketing.

At this stage, you either make your product a brand preference or you’ll go to the next stage that invokes fear among all entrepreneurs – decline.         

Stage 6: Decline

Product Development Life Cycle: What It Is & Why You Should Care 8

Team: marketers, developers, stakeholders, business analysts        
Purpose: innovate the product or exit the market         
Exit criteria: the products stops being economically viable        
Challenges: low profits, need to withdraw the product from the market

Decline is the stage that keeps entrepreneurs awake at night. While you want to avoid it at any cost, sometimes there is no way around it. The best-case scenario is when your product has reached a decline; it’s an entirely different story when the market goes through the decline stage. A great example is a CD disk that went into history because of the changes in customer demands.

To get out of the decline stage, you can concentrate on new marketing strategies, adding new features, reducing prices and exploring new markets.

At successful companies, the product development life cycle is an ongoing process. There are always some features in validation or even new products at other stages, ready to take the throne from the product in decline.

Now that you know everything about the life cycle of product development, you can easily identify the stage of your product. This understanding is vital for identifying how to take your product from one stage to another, maximize the time you spend at the growth and maturity stages, and prevent the product from entering the decline stage all too early.        

Stage 7: Afterlife

Usually, product decline means the death of a product. However, products don’t always go into oblivion after the decline. There are a few possible scenarios:

  • Gradual death if the product is no longer sufficient for the market
  • Transformation of a product into a new solution with enhanced features
  • Inspiration for a new product development
  • Resurrection of the gone product after its modernization and innovation


Product Development Team Structure

There are many people involved in the software development life cycle, all of them have an impact on the product and its future.

  • Senior management – senior stakeholders give final approval for the product to go live, for vital changes to go-to-market strategy and all other decisions that impact the road of the product.
  • Product manager – the main task of a product manager is to oversee all stages and areas of the product development life cycle. A product manager acts as a communication bridge between various internal and external teams, and initiates new product launches, features releases, and market research.
  • Project manager – project managers can help with task delegation, goal tracking, and communication between departments. The main task of a project manager is to make sure that all the processes run smoothly.
  • Design – the design team helps create a product prototype and UX/UI design of your solution following the best UX practices. Designers also help make changes to the solution based on customer feedback and market research. Also, they create marketing collateral, such as ads, banners, animations, etc.
  • Marketing – the marketing team assists with the creation of a marketing strategy. Marketers test the product idea before the product goes live, measure the success of marketing initiatives, and help the team identify weak points of the product and develop ideas on how to improve it.
  • Sales – the sales team works together with the product manager and marketing team to increase the customer base of the product and make sure the success of the digital product.       

 In addition to the above-mentioned roles, some other ones might be involved, such as the finance department, business analysts, etc.


Factors That Can Disrupt the Life Cycle of Product Development

Many factors influence the success of a product and can disrupt the software development life cycle.

  • Management support – all team members should be aligned when it comes to the product concept. After you’ve identified it, make sure that top managers understand it, along with other team members.
  • Market orientation – your new product should meet your company’s values. If the product might be popular among end-users but goes against your values, you might need to reconsider the product and even maybe put the idea aside.
  • Technology – adding new and innovative technologies doesn’t always benefit end users. All the while, it increases the product price and puts a strain on your company.
  • Emerging competitors – a new product on the market can stealyour market share. Cheaper price, better UX design, more innovative features can become a deciding factor for users.
  • Economic stability – an economic crisis can undermine the buying capacity of customers. You need to keep your product affordable to ensure high demand. Otherwise, you’ll need to explore new markets or ways to expand the user base with customers that can afford your solution.

As you can see, the success of your product doesn’t always depend on your company. Sometimes, external forces may come into your way and undermine all efforts. But unexpected changes are not always bad. They may take out your competitors, giving you more room for growth.


Real Product Development Life Cycle Examples


Now that you know everything about all the stages that a digital product goes through, let’s take a look at some real examples of products and the stages they went through.

Product Development Life Cycle: What It Is & Why You Should Care 9    


Today, we know Netflix as the most popular video streaming solution. But let's take a quick trip to its origin.    

In 1999 Netflix started as a service offering a subscription service. Subscribers chose movie titles from Netflix's website, and DVDs were mailed to subscribers with the return envelopes. Netflix had thousands of movie titles in its catalog and allowed users to rent an unlimited number of movies per month.    

A bit later, the era of DVD started to pass and Netflix met the market decline. To adapt to the new reality, Netflix started offering subscribers the option to stream some movies online. In 2010, Netflix introduced a streaming-only plan. During the growth stage, the service expanded to new markets, and in 2016 it was available in more than 190 countries worldwide.    

So, Netflix went from being a DVD-renting service to one of the most popular video streaming services in the world.    



Uber is another market leader today, but it’s not always been the same. The company saw a gap in the existing taxi market and created a solution that addressed some of the most pressing challenges – the complicated ride-hailing process and payment process.  After successfully testing their product strategy, they expanded their services with innovative features, like luxury rides. Later, they expanded to new countries and markets.   


Vine used to be a popular short-form video-sharing application. Two years after its release, the app had over 200 million active users. Vine competed in the already over-saturated market and services as Instagram, YouTube, and Snapchat. The Vine soon started to lose traction and never even entered the maturity stage. First, and then Byte took its place. But none of the solutions managed to gain the popularity of TikTok, launched in 2016 after the era of Vine had come to an end.  



Product Development Life Cycle: Summing Up

Life cycle of product development is a process with a lot of factors involved. The success of your product fully depends on your ability to innovate and come up with growth ideas. There is no guarantee that your product will navigate between stages smoothly. Prepare yourself for a bumpy ride and try to enjoy the process no matter where it takes you.

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Even if your product is in the decline stage of the product development life cycle, you don’t necessarily need to give up. There is always room for innovations, new features and product revisions. A decline is a great time to take a look at your product with clear eyes and decide what you can kill and add to get it back to the growth stage.

Usually, the life cycle of product development can be divided into seven stages: new product development, introduction, growth, maturity, saturation, decline, and afterlife.

The product development life cycle is the process of a product going through all stages of existence – from idea generation to when the product ceases to exist or transforms into an entirely new solution.

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