Pricing Over the Product Lifecycle
Adapting Strategy in an Evolving Market
SPG Insights
Spring 2006

Abstract:
Products, like people, typically pass through predictable phases. A product is conceived and eventually “born;” it “grows” as it gradually gains in buyer acceptance; eventually it “matures” as it attains full buyer acceptance; then it ultimately “dies” as it is discarded for something better. Although there are exceptions to this process (death sometimes comes prematurely, and youth sometimes extends inordinately), these typical phases present the opportunity to anticipate the future of most products. This understanding helps make up a firm’s long-run strategic plan with profitable pricing as the bottom line measure of that plan’s success. As a new product evolves through four phases—development, growth, maturity, and decline—one’s pricing strategy and tactics must vary if they are to remain appropriate.

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