A new product will go through a series of stages from introduction to growth, maturity as well as decline. This order is referred to as the product life cycle and is associated with the change in the marketing situation. It impacts the marketing strategy and the marketing mix.
The product life cycle is a vital concept in marketing as it describes the stages that a product will go through from the time it was first conceptualised until it eventually has been removed from the market. Not all products get to this final stage. Some continue to grow whereas others rise and fall.
What Are The Different Stages Of A Product Life Cycle?
The life cycle of a product has four very clearly defined stages, each with its characteristics which mean a lot of different things for business that are trying to handle the life cycle of their specific products.
This particular stage of the cycle could be the most expensive for a company launching a new product. If the size of the market for a product is small, sales will be low, even though they will be increasing. Instead, the cost of things such as research and development, consumer testing as well as the marketing required to launch the product can be very high, particularly if it’s a competitive sector.
The growth stage is typically characterised by a strong growth in sales as well as profits. As the company can begin to benefit from economies of scale in production, the profit margins – as well as the overall amount of profit – will increase. This makes it feasible for businesses to invest more money in the promotional activity in order to maximise the potential of this growth stage.
Throughout the maturity stage, the product is established. The goals for the manufacturer is now to maintain the market share that they have built up. This is perhaps the most competitive time for most products as businesses need to invest prudently in any marketing they undertake. They should also think about any product modifications or improvements to the production process which could grant them a competitive advantage.