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 The theory that a product moves through different stages: introduction, growth, maturity, and decline 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.
Product life cycle can be divided into the following five stages:
- Research and development
- product is not on the market yet
- research and development and testing take place
- The first working model of a design used for testing, development and evaluation. are built and modified before a product is ready for launch
- no sales are made
- development costs will need to be recovered later
- Introduction
- product is launched on the market
- advertising costs will be high in order for the product to get noticed
- Growth
- 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 and saturation
- sales are at their peak
- advertising can be reduced as product is now well known
- Decline
- sales begin to fall