Download The Product Life Cycle

The Product Life Cycle
Stage 1: Introduction
The product is first introduced to the
market place
Stage 1: Introduction
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Increasing high costs - little revenue / low economies
of scale
High marketing expenditure – increase product
awareness
Low sales – Customer awareness is low
High risk – Will the market accept it?
Competition - New product noticed by competitors
Price policy – Skimming or penetrating
Stage 2: Growth
The product gains momentum in the
market place
Stage 2: Growth
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Increasing sales volume – Popularity equals more sales
Retailers – Wanting to stock the product
Profits – Increase
Costs – Fall due to economies of scale
Competitors – ‘Copycat’ products enter the market
Brand loyalty – Attempt made to encourage it
Price - Product suffers from rises and falls
Stage 3: Maturity
The product is well known in the market
place
Stage 3: Maturity / Saturation
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Sales - Continue to rise but rate of growth slows
Competition – Increases further
Marketing – Further needed to maintain market share
Rivals – Weaker ones leaving the market
Extension strategies – Planning begins
Stage 4: Decline
The product is seen as out of date
Stage 4: Decline
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Sales – Dramatic fall
Competition – Many substitutes available
Marketing – Withdrawn
Profit - Declines further
Product – Withdrawn, seen as damaging to company
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Stage 1: Introduction