As consumers, we buy millions of products every year. We realize that the older, long-established products eventually become less popular, while in contrast, our demand for new, more modern goods usually increases quite rapidly. The problem is when we put on our “work jersey,” we forget about our own consumer insights and romanticize about our own product’s life cycle. Though most of us product and marketing professionals understand the product life cycle, I have found that little to no brands use the concept in any strategic manner. Before I get too far into this topic, let me review the concept for those unfamiliar with it. The product life cycle has four very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products.
Stage 1. Market Development – This is when a new product is first brought to market, before there is a proved demand for it, and often before it has been fully proved out technically in all respects. Sales are low and creep along slowly.
Stage 2. Market Growth – Demand begins to accelerate and the size of the total market expands rapidly.
Stage 3. Market Maturity – Demand levels off and grows, for the most part, only at the replacement and new family-formation rate.
Stage 4. Market Decline – The product begins to lose consumer appeal and sales drift downward.
So why am I talking about this concept?
I truly believe that the sports nutrition CPG industry romanticizes the product life cycle. I am in meeting after meeting with brands that simply don’t understand their product’s stage in the cycle. I hear things like “our pre-workout was once top 3 at GNC but sales have fallen off. We are going to ramp up the promotions and it will be growing again I am sure of it.” Even worse, they are not listening to the customer engagement that is giving them hints to this stage. I watch the trends of the social media brand accounts in our industry and I see customer after customer making mentions about products with brands giving it zero weight.
I am going to give you a reality check that you probably won’t like very much…Millennials and Gen Z buyers want continuously improved products. We grew up in an age of the Internet and apps that give us updates almost everyday. We expect much more from the products we buy today. Your pre-workout that was relevant without a reformulation for 3-7 years back in the early 00s will not be realistic today. You will be lucky if your product life cycle in some sports nutrition CPG categories will be one year.
This is frustrating, right? Don’t they understand how superior your pre-workout is to everyone else? I mean C4 lived for years without a reformulation and mine is 10x better in terms of formula. Wrong…and the popularity in the market proves that fact every single day! Truth is, consumers don’t and likely won’t ever understand the minor nuisances in products like us industry folk do, so why are you wasting your energy fighting a huge shift in consumer behavior? If the market never liked or no longer likes your product, you should not be trying to hold on to it like its your baby. I get it though, you don’t want to lose your ass with GNC or VSI dumping your SKU at 50% off. This is a sunk cost and what you should be thinking about is how you are going to adjust to this consumer paradigm shift.
I have said this hundreds of time in my articles but your traditional supply chain model is broken and your traditional retail sales channel focused model is broken.
I understand that I am oversimplifying the problems here. I also understand fully that the solutions are not going to be easy because contract manufacturers have their SOPs and you have long standing retail relationships. What I am saying is just to open your eyes to what is happening around you…