Best Practice for Pricing Over Product Life Cycle

Posted by Philip Huthwaite on September 19, 2023
Philip Huthwaite
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We all understand that products have a life cycle. They launch, gain traction, mature, and eventually decline. At each stage, your pricing strategy needs to adapt to the shifting market dynamics and evolving consumer expectations.

A well-calibrated pricing strategy can do more than just bring in revenue; it can augment your product's life cycle. For instance, when you introduce a new product to the market, your pricing should aim not only to attract new customers but also to build brand awareness. As the product matures, adjustments in pricing may be necessary to maintain your competitive edge.

It's here that many companies falter. Grasping the importance of aligning your pricing strategy with your product's life cycle is crucial for maximising both revenue and profitability.

So, how should you approach pricing in product life cycle? In this blog post, we'll explore best practices for pricing your product throughout its life cycle. From its introduction to its decline, let’s look at how to optimise your pricing strategy product life cycle.


Pricing Strategies Across the Product Life Cycle

You’ve likely put a lot of thought into your product’s development and deployment. Whether you sell t-shirts online or manufacture home products, your pricing strategy will ultimately determine your long-term success. The key is determining the evolving pricing strategy product life cycle.



Introduction Phase

This is the initial stage where your new product is launched into the market. Online platforms can speed up visibility through targeted ads and influencer partnerships, but pricing is often the key to whether the product gets the attention it deserves.

  • Penetration Pricing: Start with a lower price to attract a large customer base quickly, making it difficult for competitors to gain a foothold.
  • Price Skimming: On the contrary, you could opt for a higher initial price if your product offers unique features or technological advantages, lowering the price as competition enters the market.
  • Introductory Promotions: Limited-time offers and discounts can create urgency and attract early adopters.


Growth Phase

Once the product gains initial traction, this phase aims for rapid sales growth and market penetration.



In eCommerce, the growth phase often includes a global reach as the product becomes available to a broader audience. You won’t want to sacrifice margins or outpace your consumer-perceived value, so refine your pricing in product life cycle stages like growth.

  • Bundle Pricing: Pair the new product with established products to increase its perceived value and encourage purchases.
  • Dynamic Pricing: Use real-time data analytics to adjust prices according to demand, inventory, and other market factors.
  • Versioning: Offer multiple versions of the product at different price points to appeal to various customer segments.


Maturity Phase

This is the peak of the product's life cycle pricing, where sales growth has started to slow down, but the product still has a steady market share. Your eCommerce strategies at this point focus on differentiation and retaining customer interest.

  • Value-Based Pricing: Understand what your product is worth to your customers and price it accordingly. At this stage, your product has earned its reputation, making it easier to justify the price.
  • Competitive Pricing: Monitor competitor prices closely and position your product in a way that offers superior value.
  • Loyalty Programs: Incentivise repeat purchases through rewards or discounts for loyal customers.


Decline Phase

Despite best efforts, most products will eventually see a decrease in demand. In eCommerce, the decline phase can be quite abrupt due to rapid shifts in consumer trends and behaviour.

  • Discount Strategies: To clear out inventory, consider implementing flash sales, clearance discounts, or buy-one-get-one-free offers.
  • Cost-Plus Pricing: Stick closely to a markup that covers your costs but is lower than previous pricing stages to encourage remaining sales.
  • Phased-Out Promotions: Offer special discounts to loyal customers to sell remaining stock before discontinuation.


Identifying Your Product's Life Cycle Pricing Stage: Tips for eCommerce Businesses

Understanding where your product currently resides in its life cycle is essential for making informed, strategic pricing decisions. It’s not just about recognising the current stage but also anticipating and preparing for transitions. Here are some tips to help you determine your product's life cycle stage:


Tip 1: Monitor Sales Trends

Regularly check your sales data to understand how well your product is performing. Are you seeing an uptick in sales? Consistent increases could indicate a growth stage, while a sudden dip or plateau could signal maturity or decline.


Tip 2: Analyse Customer Engagement

Keeping tabs on your product page visits can provide valuable insights. A high number of visitors that convert into customers might suggest that your product is in the growth or maturity stage. Conversely, a decline in conversion rates could be a warning sign that your product is entering its decline phase.



Tip 3: Watch Inventory Levels

Assessing how quickly your inventory turns over is another valuable metric. If you find that your inventory is depleting quickly, it could suggest that your product is in the growth stage. On the other hand, if stock levels remain stagnant over an extended period, your product may be entering the decline stage.


Tip 4: Keep an Eye on the Competition

Be aware of what your competitors are doing when pricing in product life cycle stages. If you see a flurry of similar products entering the market, your product may still be in its growth stage. Price wars often signify that a product has matured and is possibly on the decline, as businesses try to maintain market share through aggressive pricing.


Tip 5: Listen to Customer Feedback

Customer feedback, especially in the form of product reviews, can provide invaluable insights into which life cycle stage your product is in.

A rising trend in positive reviews generally indicates growth or maturity, whereas an increase in negative feedback can suggest your product is in decline. If you're getting frequent queries about new features, it might be time for an update or a relaunch, essentially rebooting your product's life cycle.


How BlackCurve Helps You Navigate Pricing Across the Product Lifecycle

Product lifecycles are getting shorter - with BlackCurve, you can adapt your pricing strategies quickly to ensure maximum sales and profits. Whether you're in the introduction stage or decline phase, our automated pricing engine will streamline processes for effective and efficient price optimisation.



Initial Price Setting: Utilise BlackCurve's analytics to determine an initial price that will capture attention while laying the groundwork for future price adjustments.

Competitor Benchmarking: BlackCurve provides insights into competitor pricing, ensuring that your introduction price is competitive yet profitable.



Dynamic Pricing: Automated algorithms adjust your price in real-time, reacting to increased demand and competitor activities. This ensures you capture as much of the growing market as possible.



Promotional Pricing: Employ BlackCurve's analytics to strategically implement sales or discounts that will maintain interest in your product without sacrificing significant revenue.

Inventory Management: Get real-time insights into stock levels, allowing you to adjust pricing to clear old stock or take advantage of scarcity.




Liquidation Strategy: As your product nears the end of its life cycle, use BlackCurve’s analytics to set pricing levels that encourage stock clearance without drastically harming your brand value.


Make 'Price' the Linchpin of Your eCommerce Strategy

Understanding the interplay between your product's life cycle and pricing strategy is essential for maximising revenue and profitability in an eCommerce setting. From the introductory phase to inevitable decline, each stage of your product's life requires a unique approach to pricing.

Whether you're looking to identify your product's life cycle pricing needs, optimise your pricing, or outmanoeuvre competitors, BlackCurve equips you with the sophisticated solutions you need to succeed.

Don't leave your pricing to chance. Make it a strategic asset that complements your product's life cycle. Explore BlackCurve today to start your journey towards optimised profitability and sustained growth.

Topics: Ecommerce Pricing

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