The product life cycle refers to the stages that products go through from initial market distribution through eventual product death. It has always been articulated according to four well-defined stages, including introduction, growth, maturity, and decline. Every one of these possesses its own distinctive elements which force businesses to adapt as the product life cycle of their goods changes over time. Here we’ll look at the four stages in the product life cycle in more detail.
Introduction stage
In the first introduction stage, businesses are required to spend comparatively huge sums of money on launching their new item to the markets. The reason for this is that typically the market size for the new product will be small initially. It causes upfront sales to be low at first. These do increase with successful marketing and the natural unfolding of time. Successful product launches demand that firms spend enormously on categories such as R&D (research and development), consumer testing, advertising, and marketing. Just like you the 7 figure cycle product was launched… This is especially true when the new product represents a sector that is already established and highly competitive.
The Growth Stage
This phase will be represented by impressive sales growth along with rising profits from the item. The firm is now able to realize the advantages inherent in strong economies of scale for the product production, distribution, and margins on profits. These results allow and encourage companies to invest additional resources into the product promotions so that they can realize the optimal market share gains in this second rewarding stage of the product life cycle.
The Maturity Stage
In this advancing phase of the life of a given product, the item has become well-established enough that the firm’s goal becomes one of holding on to the impressive market share which they have gained for as long as possible. It represents the period that is most product-competitive. Firms are required to smartly invest resources in advertising in this stage. It is also a critical time to begin contemplating improvements or changes to the product and its manufacturing process that will help them to secure a competitive advantage over their rivals in the space for the future.
The Decline
No item will remain on an upward or even level trajectory forever. Their market share and even the market itself will begin to decrease. There are several reasons for why this might occur. It may be that the market finally becomes saturated by the product directly or it and its combined rivals. This means that every customer who might acquire the product has already bought it. Similarly the consumers may simply tire of the product and move on to another completely different and newer one. Firms are still able to earn profits through changing their methods of production to less costly ones or in moving them entirely to jurisdictions where production costs are significantly less.
The product life cycle has existed for many decades now. This means that all manufacturers of products must have a firm comprehension of it so that they can effectively realize maximum profits and remain in business. Understanding it is only a first step though. The product cycle must be effectively managed over the whole life of the item. This way marketing and sales strategies can be kept at maximum efficiency based on where the product is within its particular life span and cycle.