Hey! Do you want to know product life cycle, like human beings, have a length of life? The life cycle of a product is known as the product life cycle.
The product life cycle may be short for some other products and long for some other products, A products life begins when it is launched in the market for sale. After that it goes through several stages and finally, the product dies.
A product moves through five different stages of its life cycle and also how profit remains stage to stage are described below –
1.) Introduction stage
During, this stage the product is born. It may be entirely a new product or a new version of some basic product, The firm informs the Market about the existence and features of the product, competition is virtually absent, the market is limited, prices are relatively high.
Growth in sales volumes is at a low rate due to a lack of knowledge on the part of consumers. Thus this stage is very Risky because a high percentage of new products fail during this period.
2.) Growth stage –
In this stage, the demand, as well as sales of the product, grow rapidly, distribution is widened, competition increases and prices falls. Promotional focus shifts from “buy my product” to “buy my brand”.
The firm expands its sales by increasing market share in the existing markets and also by entering into new markets.
In this stage, the firm earns profits as well as good turnovers and became famous in the market with a good image.
3.) Maturity stage
During this stage the product gets matured, sales continue to grow but at a decreasing rate. Competition increases further, and markets get stabilised. The product is known all over the market but it doesn’t mean the firm faces loss in this stage.
You can say that the product is not as famous as the growth stage, manufacturers change their lives and new models of the product are introduced. After some time there is no possibility of an increase in sales with long-run demand for the product.
But sooner or later product demand starts declining as new products are introduced in the market.
4.) Decline stage
In this stage, the product is displaced by a change in consumers buying behaviour. Sales minimize sharply and promotional expenditures have to be reduced drastically, to minimize loss unless, New uses of the product are found, the sales may decline rapidly and the product may soon go out of the market
Actually, the matter is that the company shifts their mind and concentration to launch another product and busy in its advertisements, promoting and selling.
That’s why the product is no more important or valuable in the market. Thus the product becomes old and soon die.
5.) Abandonment stage
In this stage the product is abandoned or dies, preferences of consumers may change and new innovations enter the market to take the place of the abandoned products.
Some firms even try to postpone abandonment by introducing new models with unique features.
Now it all goes to the firm that what they were doing regarding the launching of new products to meet out the market competition ( sales, Volumes, competitors and etc.) again to build to a new image of their brand in the competitive market.
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– Sujan Shaw