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The product life cycle represents the stages that a product goes through from the initial development, right through to the overall decline and withdraw.

The life cycle and how long it takes a product to go through its life cycle, can vary enormously from one product to another. Some products will exist for years before entering a decline, while other less successful products may go through their life cycle very quickly. How long a product lasts will depend upon:

• how dynamic the market is, eg technological products such as tablets and laptops, have short life cycles as they quickly become out of date as new technology emerges
• how strong the brand image behind the product is, eg a new sports shoe from a well-known brand is likely to have a longer life cycle than a new sports shoe from an unknown brand

Stages of the product life cycle

Introduction

At this stage, the product is released to the market. Sales begin and grow slowly as customers are getting to know the product. Revenue is very low at this stage as the product is new to the market. There are high costs on materials, promotion and publicity as the business needs to make people aware of the product.

Growth

At this stage sales are growing quickly. People are beginning to buy more of the product and it is becoming successful. Revenue is increasing, though costs are still high as promotion is still taking place. The business may start to break even on costs and may begin making a profit.

Maturity

Many customers and potential customers have already purchased the product at this stage, so sales growth begins to slow. Revenue is increasing by this stage and a business would expect to be making a profit. Costs may decrease in the maturity phase as most people are aware of the product, so less promotion is required.

Saturation

Sales growth is rapidly slowing and may start to slowly decline. Revenue is still high, although it is slowing down. Costs may rise at this stage, as the business may attempt to increase sales through increased promotion or changing the product.

Decline

Sales begin to fall as the product becomes less popular and customers turn to other products. Revenue will fall rapidly at this stage as the product comes to the end of its life cycle. Costs will either reduce as the business discontinues a product, or increase as the business continues to try to promote a product.