4 stages of product life cycle

PRODUCT LIFE CYCLE

Product is the core concern of any company. All efforts are related to the product from the raw materials to the final form. The business enterprise devotes all its resources to developing, providing and maintaining the product during its business operations. Normally, products have the following four stages.

Introduction stage

The stage where a new product is introduced in the market after continuous research and development and all development processes. At this point, there are only one or more manufacturers in the market. Since there are fewer manufacturers, so there is almost no competition. Since sales are lower, profits are lower.

At this stage product appears as “Question Mark” which shows product may be successful in the market & may not be.

Growth Stage

At this stage, customer awareness develops and people start to know more and more about the new product in the market, so the sales of the product increase due to:

• Repeated orders of the old customers.
• New customers will also enter the market.

 

At this stage, product is called as “Star” as it generates good profits for the firm.

Maturity Stage

Since at this stage people become more and more familiar with the new product in the market, so there comes a time when not only the product becomes stable, but people also start identifying the company by referring to that particular product. Here the product gains "mind share" among target markets. At this stage, the product has:

• Highest level of sales in the market because of awareness about the product. 
• More sellers will also enter in the market.
• Completion become very high

At this stage, product called as “Cash Cow” as now profit margins may be less than growth stage but product gains relatively more market share.

Decline Stage

This is the last step of any product. Product loss market share as well as profit for the company. At this stage, the product will disappear from the market. In order to return the product to the market, the following important actions are very necessary for the company:

• More & more D & R & innovation in order to add more feature in the product.
• Searching of new target markets for the product.
• Evolution of new co‐product

 

At this stage product called as “Dog” as production & development costs are more & more but no profits at all.