What is a product life-cycle?
This refers to the period that a product takes in the market since its introduction to the point it declines and becomes obsolete (Singh, 2017). The cycle goes through five stages as stated below:
Five stages of product life-cycle
Before introducing the product into the market, its research is done and the effectiveness of the product is tested and a plan on how to launch the product in the market is done by the investors at this first stage. It is a non-profit making stage as no product is being sold out. Competition and complexity of the product determine how long this stage lasts. However, for a completely new product, this stage lasts longer.
At this stage, the company launches the product to potential customers through advertisements and product market campaigns. This is done to create awareness of the product to the public and potential customers. Low sales are made at this point as the demand for the products is slowly built. When the demand is fully established and the customers become fully aware of the product, then the product moves to the growth stage
Growth suggests that the product has been accepted by the consumers and there is development in product purchase and possible growth in profits. Therefore, the success of the product at this stage attracts competition. Additionally, more features are added and new distribution channels opened to ensure wider market coverage.
High competition at this stage makes the company reduce the product’s prices causing leveling off of sales from the rapid growth period. Hence, product differentiation is introduced for the company to stay competitive. Therefore, the product becomes more profitable at this stage as the production cost declines with the sales increasing.
Due to strong competition and customers’ loss of interest, the product might experience a decline in sales. At this stage, the company can opt to windup or discontinue the product.
A life cycle of a product is the duration a product takes from the time of its introduction in the market to the time it declines and becomes obsolete. The product undergoes five stages upon its introduction to the market as follows. In the development of the product stage, research on the product is done and its effectiveness tested. Similarly, in the second stage, product introduction in the market is done and the potential customers are made aware of its existence. In the growth stage, the product is accepted by the consumers and the company starts making profits, therefore, expanding its distribution channels. However, this success attracts competition. Furthermore, at the maturity stage, competition becomes stiff in the market therefore the sales of the product level off from the rapid growth stage. Finally, when the competition becomes too stiff to control, the product sales decline and the company decides to discontinue the product.
Singh, A., & Kushwaha, T. (2017). Impact of packaging, branding, labeling for new product on consumer behaviour in modern age. International Journal in Management & Social Science, 5(1), 10-13. https://www.academia.edu/download/60187434/IJMSS1Jan17-Rohtash20190802-18371-14clvxl.pdf