Product life cycle
All products go through distinct phases or stages. Together these are known as the The theory that a product moves through different stages: introduction, growth, maturity, and decline.
The number of sales and the length of a product life cycle might be different for different products but all products share a general pattern of growth and decline. This cycle can be shown on a graph of sales over time.
Many businesses record and track sales information like this to help them know when to adjust costs and price, to boost sales and to extend the life of the product.
- Development鈥 Product is not on the market yet. Research and development and testing take place. Prototypes are built and modified before a product is ready for launch. No sales are made. Development costs will need to be recovered later.
- Introduction鈥 Product is launched on the market. Advertising costs will be high in order for the product to get noticed.
- Growth鈥 Sales begin to rise. Advertising costs are still high. A profit may be made, if all research and development and advertising costs have been recouped.
- Maturity鈥 Sales are at their peak. Advertising can be reduced as product is now well known.
- Decline鈥 Sales begin to fall.