Pricing Academy Article

Pricing over product lifecycle

The life cycle of a product helps organizations make major pricing decisions and policies that ensure that the product survives the cut-throat market competition and stays afloat no matter how challenging the situation gets.

The product life cycle pricing ensures that the buyers are enticed to choose a brand over the others time and again. Pricing strategies can make or break a business! 

The four product Life-Cycle Pricing Strategies for Different Stages

Market Introduction/ Development Stage

At this stage, the product is still emerging, developing its market and awareness is still being spread. Products require a significant investment of capital, in the initial stages to manufacture products, maintain the quality, market and promote it. The risk faced by businesses at this stage is generally high as along with pricing the products appropriately; they also need to make a mark in the minds of the consumer.

Growth Stage

By this stage, customers accept the product, become aware of what a brand is offering. So, businesses during this stage work towards achieving a more significant share of the market.

The product needs to stand out from the other products available on the market. If the marketing technique works well, then there is a simultaneous increase in demand and profit.

As the name suggests, consumers are generally curious to purchase the product as they are attracted to the marketing campaign.

Maturity Stage

Also known as the stage of saturation, businesses generally feel there is a sudden halt in revenue development as sales begin to slow down, and so does the overall growth.

By this time, businesses do not require funding, and the brand matures in the market stage.

Decline Stage

This stage is generally the most challenging for a product as with market saturation, massive high competition, and changing interest from customers the existence of a business is at risk.

To survive this stage and in order to ensure a continuation of the products market presence, businesses begin adopting aggressive marketing techniques. This stage decides if a product will be able to survive in the market or not.

Some reasons for the decline are:

  • The interest of the consumers has changed.
  • A brand is not able to offer something new.
  • Competition has taken over the market.

Pricing in the Introduction Stage

If the product is unique and consumers are introduced to something completely new, then the prices can be fixed high. 

With the high-prices, the massive development and promotional costs can be earned back. 

If the product that you have launched onto the market already faces high competition, then you must set the price lower than average to entice consumers to try out the new product.

Setting the product price in the initial stage is tricky. If you set the prices too high, then price-sensitive customers may refrain from even giving your product a try, and the others may consider your brand as being overly prized.

On the other hand, if you set the prices very low, you might be signalling poorer quality.

So, understand what you are offering -whether it is unique or not. It’s also vital that you understand the situation on the market.

Pricing in Growth Stage

Now, when the market has accepted you as a business you need to focus on retaining customers. This can be done by decreasing the prices. It is during the growth stage when businesses can earn revenue to recover from the initial investments and marketing expenditure as long as they are able to still price high enough to cover their costs.

Understand what the competitors are doing in the market and set competitive prices. 

You may have to lower the costs to match-up to the competitive market.

Time to start monitoring the market?

 Pricing in Maturity Stage

Competition at this stage gets fierce! Brands reach a saturation point by now, and revenue production becomes very challenging. 

The successful way out through this is to invest in re-creating the product and revamping it entirely to create curiosity in customers.

Some maturity life cycle stage pricing examples would be- introducing special discount period offers, providing privileges to the loyal members, introducing exclusive membership offers, etc.

These tactics work better than reducing the prices as these create curiosity in people. 

Pricing in Decline Stage

As the market saturates and reaches its lowest, making drastic changes in the pricing helps meet the business goals. Three major evils that come into play at this point are high competition, changing customer needs and market saturation.

To survive this stage, businesses and brands must reduce production costs and minimize production so you aren’t stuck with a huge inventory that you then need to sell off at a minimum price. The focus must be to re-establish the name by adding new features to the product and market it to the loyal niche.   

The life cycle stage price elasticity varies at each development stage. With the competition rising at every stage, making a brand the top priority for the consumers becomes the most challenging part.

Through every stage that the product progresses the competition increases and makes consumers more price sensitive.


The product life cycle pricing is a tool for the marketers, designers and management alike that promises overall success of a product in a market. Businesses can derive the most value out of a product/service with the help of smart pricing strategies. The rising sale will not always mean progress; neither declining sales always indicate an ultimate doom. 

If product pricing is done after understanding its role and importance, then it can lead to consistent sales for a business.

Sniffie Blog

Check out our latest blogs

Product Release – General Widget

NEW: Vastly improved analytics capabilities! We at Sniffie are beyond excited to tell you about our newest product release which includes the biggest improvements to

Read more