The 5 Stages of The Product Life Cycle
By Brittany Bell
What are product life cycles? Product life cycles is an analysis from a business perspective that identify 5 common stages in the life of a product.
Introduction Stage The introduction stage is when a company first introduces a product onto the market after developing it. A company will either use a skimming strategy, prices are low then grow over time or a penetration strategy, where the initial price is highest, then lowers over time. The main concern and challenge in the introduction stage is to get your product known and out there. Their target market is the innovators.
Some entrepreneurs introduce their product to investors, like on “Dragons’ Den”. If they intrigue the investors, they then have the funds to sell them on the market
Bands can be seen as products too. When they are first introduced, the main goal isn’t to sell songs until they match the costs of production, but to expand their fan base and get their music known and on radio.
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Growth Stage The growth stage comes after the product is introduced and catch the attention of the early adopters. It is important to advertise your product. During the growth stage, sales and revenues begin to increase as customer demand grows. Price may increase and target market may expand during this time. This is the most critical stage in the product life cycle. Without it, the product couldn’t reach the other stages of the cycle and wouldn’t be able to meet the costs of development.
The iphone 5s & 5c were introduced a month ago. Sales have increased rapidly, outselling it’s competition Current Price: 599.00 - 719.00 (5c) 719.00 - 919.00 (5s)
GTA V was recently introduced, and already made $800M, beating out 4 world records in one month. Sales haven’t begin to decline, so it is still in it’s growth stage
Maturity Stage The maturity stage is the stage that occurs when sales have reached their peak, then begin to slow down. Companies may add features and upgrades to keep the product at this stage for the longest time possible.
THE
DECLINE
STAGE
When the maturity stage hits its peak, it usually declines and enters the Decline Stage. In this stage, sales, along with consumer interest, start to decline and product becomes less popular.
Betsey was a popular designer & clothing line, but then declined & filed bankruptcy in 2012. In early 2013 she tried to reinvent her line and it became popular for a while, but now it is yet again in decline. CD disks are in decline and not in demand as they have been replaced by .mp3 files on the internet and itunes. Even Toronto’s hugely notable “Sam The Record Man� has closed
Decision Point Stage After sales hit an all-time low and consumer demand is very low, the decline stage eventually turns into the decision point stage. In this stage, companies must decide whether to continue selling the product, or remove the product from the market. To discontinue and stop selling the product guarantees no sales or interest, while continuing to selling it may gather more sales and demand, if they are able to re-vamp and update a product successfully to make it more appealing.
NKOTB and BSB reunited in 2008 and 2012, and continue to make music and earn profit!
The End Now you are able to distinguish and identify the different stages of a product’s life cycle. Thank you for reading this online book, there are many more to come.