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Businesses are able to use the product life cycle to help them understand how a product is performing, the stage it is at on the product life cycle and if an extension strategy should be introduced.

The product life cycle may also give the business information about which products to produce in future, whether further investment is required, and whether more marketing and promotion is required to increase the longevity of a product.

The product life cycle may help a business make decisions about pricing, costs, promotion, extension strategies, decisions about their product range and decisions about the overall direction of a business.

Different business contexts

Different business contexts affect the product life cycle:

• Products sold by well-established business may have a long product life cycle that only requires minor changes to help maintain or increase sales.
• A business making seasonal products with relatively short life cycles, such as a fashion item or food product, may have to consider more carefully how they could extend the product life cycle, before introducing new products to the market.
• Technological products may have their product life cycles extended through the use of software updates to keep them current. However, technology businesses also have to consider that technology tends to advance rapidly, and overall product life cycles may be relatively short.
• Some businesses sell products that follow a short term boost in popularly, for example fidget spinners. These businesses usually accept that the product life cycle is short, so it is important that they have a broad product portfolio.
• A small business may be able to manage their product life cycle much more closely, and may find it easier to introduce extension strategies.
• The size of the business and the industry they operate in may impact their ability to respond to the dynamic nature of the product life cycle. Businesses that can respond more quickly are more likely to be able to prolong the life cycle of their products.