Stages in the Product Life Cycle
There are four stages in the product life cycle: introduction, growth, maturity, and decline.
LEARNING OBJECTIVES
Examine the various stages of the product lifecycle
KEY TAKEAWAYS
Key Points
- The introduction stage of the product life cycle is where a new product is launched into a market.
- In the growth stage of the product life cycle, the market has accepted the product and sales begin to increase.
- In the maturity stage of the product life cycle, sales will reach their peak.
- In the decline stage of the product life cycle, sales will begin to decline as the product reaches its saturation point.
- There is no set schedule for the stages of a product life cycle.
Key Terms
- product life cycle: The process wherein a product is introduced to a market, grows in popularity, and is then removed as demand drops gradually to zero.
Stages in the Product Lifecycle
There are four stages in the product life cycle: introduction, growth, maturity, and decline.
Life Cycle: Firms’ products progress through the stages of development, which is indicated by their changing profits over time.
Introduction
After all research and development has be done it is time to launch the product and begin its lifecycle. The introduction stage of the product life cycle is when the marketing team emphasizes promotion and the product’s initial distribution. Often the product will have little or no competitors at this point. Nonetheless, sales may remain low because it takes time for the market to accept the new product. At this stage of the life cycle, the company usually loses money on the product.
Growth
In the growth stage of the product life cycle, the market has accepted the product and sales begin to increase. The company may want to make improvements to the product to stay competitive. At this point, there are still relatively few competitors.
Maturity
In the maturity stage of the product life cycle, sales will reach their peak. Other competitors enter the market with alternative solutions, making competition in the market fierce. The company that introduced the new product may begin to find it difficult to compete in the market.
Decline
In the decline stage of the product life cycle, sales will begin to decline as the product reaches its saturation point. Most products are phased out of the market at this point due to the decrease in sales and because of competitive pressure. The market will see the product as old and no longer in demand.
There is no set schedule for the stages of a product life cycle. Differences will occur depending on the type of product, how well it is received by the market, the promotional mix of the company, and the aggressiveness of the competition.