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There are five stages in a product's life cycle

Introduction

New products are introduced to meet local (i.e., national) needs, and new products are first

exported to similar countries, countries with similar needs, preferences, and incomes. If we also

presume similar evolutionary patterns for all countries, then products are introduced in the most

advanced nations.

Growth

A copy product is produced elsewhere and introduced in the home country (and elsewhere) to

capture growth in the home market. This moves production to other countries, usually on the

basis of cost of production. (E.g., the clones of the early IBM PCs were not produced in the US.)

The Period till the Maturity Stage is known as the Saturation Period

Maturity

The industry contracts and concentratesthe lowest cost producer wins here. (E.g., the many

clones of the PC are made almost entirely in lowest cost locations.)

Characteristics of Maturity stages of Product life cycle

1. Competition is high2. Product is established and promotion expenditures are less3. Little growth potential for the product4. Penetration pricing, and lower profit margins5. The major focus is towards extending the life cycle and maintaining market share6. Converting customers product to your own is a major challenge in maturity stag

Saturation

This is a period of stability. The sales of the product reach the peak and there is no further

possibility to increase it. this stage is characterised by

Saturation of sales (at the early part of this stage sales remain stable then it starts falling) It continues till substitutes enter into the market.

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Marketer must try to develop new and alternative uses of productDecline

Poor countries constitute the only markets for the product. Therefore almost all decliningproducts are produced in developing countries. (E.g., PCs are a very poor example here, mainly

because there is weak demand for computers in developing countries. A better example is

textiles.)

Three phases of this stage are:

Growth (Sales growth rate starts to decline) Eg:

Tata Indigo sold 3,436 units in Feb 07 (7% increase over Jan 07 but less than Feb 06 over Jan06 increase)

Stable (Sales flatten) Eg:

Maruti Suzukis Alto, Zen,Estillo and Swift sales stood at 34,759 units in July 08 as,against34,737 units in July 07 (up 0.2%).

Decaying Maturity (Absolute level of sales startsto decline) Eg:

Maruti 800 sold 5,970 units in July 07, but only 4,953 units in July 08 (17% decline)

Maturity Stage