Product Life Cycle Stages Explained

ProductLifeCycleStages.com


This initial stage require significant investment


Challenges of the Introduction Stage◦ Small or no market: start with low sales◦ High costs: invest in R&D, marketing and promotion◦ Losses, Not Profits: negative profits

Benefits of the Introduction Stage◦ Limited competition: the lack of direct competition

is an advantage◦ High Price: new product price can be above market

price


Product Life Cycle Management◦ All about building the demand and establishing the

market◦ Emphasis on promotion, production and developing

distribution channel

Photo: flickr/AlainDurand


The key stage for:◦ Establishing a product’s position◦ Increasing sales and ◦ Improving profit margins

Requires:◦ Development of consumer demand ◦ Reduction of manufacturing costs


Challenges of the Growth Stage◦ Increasing Competition: from new manufacturers◦ Lower Prices: to achieve the desired increase in sales◦ Different Marketing Approach: to make the most of the

growth potential

Benefits of the Growth Stage◦ Costs are Reduced: through economies of scale◦ Greater Consumer Awareness: leads to the sales increase◦ Increase in Profits: both in overall amount and profit

margin


Product Life Cycle Management◦ Typically profits are highest during the Growth

stage◦ Necessary to reinvest in marketing and promotional

activity

Photo: flickr/Promoview Marketing Promocional


The primary focus is to maintain market share


Challenges of the Maturity Stage◦ Sales Volumes Peak: the market becomes saturated◦ Decreasing Market Share: challenge to maintain market

share◦ Profits Start to Decrease: less market share, less profit

Benefits of the Maturity Stage◦ Continued Reduction in Costs: economies of scale &

production efficiency◦ Increased Market Share Through Differentiation:

innovative marketing campaigns or diverse product features


Product Life Cycle Management◦ Innovation will maintain or even

increase market share

Photo: flickr/Vermin Inc


Demonstrated by the fall in both sales and profits

Opportunities to continue making profit


Challenges of the Decline Stage◦ Market in Decline: difficult to prevent◦ Falling Sales and Profits: to slow this fall by trying

and increasing market share ◦ Product Withdrawal: before losing money

Benefits of the Decline Stage◦ Cheaper Production: if able to reduce costs◦ Cheaper Markets: to look to new, cheaper markets


Product Life Cycle Management◦ In the Decline stage, a product can still be viable◦ Successful manufacturers focus on effective product

life cycle management

Photo: flickr/Michael P. Whelan

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Product Life Cycle Stages Explained

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