Product Life Cycle and How it Relates to Healthcare


Published: 25 November 2015

We’re all familiar with the technology giant Apple. The incredibly successful company that has brought us products like the iPhone and iPod. Both of these products quickly became must-have devices and sold phenomenally throughout the world.

Today, however, iPod sales account for a small fraction of Apple’s total revenues, yet sales of a new, but similar device—the iPhone—have largely replaced this lost revenue. Unlike most companies, Apple was able to successfully develop an iPod killer. It did this with the future in mind, allowing them to ultimately retain the market. What can the healthcare industry learn from such an approach?

The concept described above is referred to as a ‘product’s life cycle’. Specifically, it describes a number of commercialisation steps that each product goes through as it penetrates the market. These steps include the initial research, sales growth, maturing of market demand and ultimately the product’s decline. Apple foresaw the ultimate decline of a dedicated personal music device—the iPod—in lieu of a more broadly useful device, such as the iPhone. So, rather than dedicated time to building a better iPod, they focussed on building its perfect competitor.

Product life cycle and healthcare

We all remember the white earbud headphones synonymous with iPods.

Let’s have a look at how similar concepts could be applied to healthcare’s value chain (its product). As mentioned earlier, the product life cycle is separated into four different stages, namely introduction, growth, maturity and in some cases decline.


The introduction phase is the period where a new product is first introduced into the market. This typically requires a lot of resources and finances. As a result, many companies, startups especially, are practicing a new approach to product development known as The Lean Approach. The introduction phase is usually associated with slower growth as the public is not familiar with the product, the sellers may not be adequately trained to sell, and clear and definite distribution channels are yet to be established. Demand for the product is also quite immature at this stage.

The stages of a products life cycle in healthcare

So how does this relate to healthcare you may wonder? Well… a hospital may introduce a new ward. Inevitably, this will require some form of advertising, possibly through community groups, notice boards and/or the media. In this phase, one will see a lack of familiarity among patients about these new services, and even the healthcare providers themselves may not have enough knowledge to give enough information. This is normal and indicative of the stage the new product is at.


The growth phase is when your product starts to sell at a much faster rate. The public is becoming increasingly aware of your product and word of mouth is starting to spread. The product’s capabilities are now recognised and product development has matured (the rate at which you’re changing your offering slows). In healthcare, this stage can be hard to recognise, but is probably most noticeable when demand for your services starts to sustain regardless of whether you’re advertising or promoting it.


The maturity phase is when your product’s sales begin to peak. Demand is strong and the service is now booking out. Very soon, the product will begin to compete with new alternatives being introduced into the market. A good example of this stage in healthcare is the availability of a new pharmaceutical product. Fresh from successful clinical trials, the drug is likely to generate attention in the media. Patients may approach their healthcare providers requesting that particular medication as a result of increased popularity or awareness.


The decline phase refers to the period when the product reaches its saturation point. In this case, the price can start increasing, though the number of sales will decline. In this phase, a decision is needed: whether to continue with the product with significant changes or to move onto another product altogether. In healthcare, a suitable example could be a medical device or equipment such as a wheelchair. As technology improves, the consumer market, including healthcare professionals who use that particular product may start to see it as old or outdated. They perceive the product as no longer being able to effectively provide the required care to the patient. The device sales will decrease sharply and the company needs to either improve the device, by offering a newer edition, or replace it with a better alternative.

In healthcare, simply by monitoring a products or services life cycle, management can better plan when to introduce a new service or product. Ultimately, seeing healthcare as an industry that provides products/services and understanding their life spans, allows for a system that delivers effective and transformative healthcare. One that keeps up with the changes and needs of society.