Stages of product life cycle
the product life cycle is divided into four stages: introduction, growth, maturity, decline.
·
Introduction
stage: in this stage, the new product is launched in the market. The
marketing objective is to create product awareness. The characteristics of this
stage are
I. slow sales growth: consumers are unaware about the product. They are reluctant to change their brand. Technical problems delay production. Distribution channels are inadequate.
II. Negative or low profits: sales are low. Distribution and promotion expenses are heavy with product introduction. Profit is negative or low.
III. Few competitors, high price: the competitors are few. They lack production facility and technical know-how to compete. Similarly, high price is charged to recover heavy costs incurred on product development.
I. slow sales growth: consumers are unaware about the product. They are reluctant to change their brand. Technical problems delay production. Distribution channels are inadequate.
II. Negative or low profits: sales are low. Distribution and promotion expenses are heavy with product introduction. Profit is negative or low.
III. Few competitors, high price: the competitors are few. They lack production facility and technical know-how to compete. Similarly, high price is charged to recover heavy costs incurred on product development.
·
Growth
Stage: this stage is the period of market acceptance. The marketing
objective is to increase market share. The characteristics of this stage are
I. rapid sales growth: the innovator customers continue to buy the product. New segments start buying the product. Product acceptance increases
II. Rising profits: high sales at high prices generate profits. Production and promotion costs are spread over a large volume.
III. Growing competition: new competitors enter the market they are attracted by opportunities for large scale production and profit.
I. rapid sales growth: the innovator customers continue to buy the product. New segments start buying the product. Product acceptance increases
II. Rising profits: high sales at high prices generate profits. Production and promotion costs are spread over a large volume.
III. Growing competition: new competitors enter the market they are attracted by opportunities for large scale production and profit.
·
Maturity
stage: this stage is the period of defending market share. The rate of
sales growth slows down. The marketing objective is to stabilize profit and
defend market share. Characteristics of this stage are:
I. slowdown in sales growth: the product achieves acceptance by customers. The industry has over capacity. The sales are at their peak level. Sales growth slows down.
II. Intense competition and lower price: the competition intensifies. Price wars take place leading to lower price levels.
I. slowdown in sales growth: the product achieves acceptance by customers. The industry has over capacity. The sales are at their peak level. Sales growth slows down.
II. Intense competition and lower price: the competition intensifies. Price wars take place leading to lower price levels.
Decline stage: this is the stage when sales decline and profits also decline. The marketing objective is to survive and eventually withdraw from the market. Characteristics of this stage are
I. declining sales and profits: the decline in sales is rapid. Technological advances, intense competition, changes in consumer preferences and price cutting are the reasons for sales decline. Similarly, profits decline and reach zero or negative level.
II. Only hardcore loyal and totally customers remain.
III. Declining competition: competitors withdraw from the market. They incur losses
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