product life cycle

product life cycle
The course of a product's sales and profitability over its lifetime. The model describes five stages, each of which represents a different opportunity for the marketer. A new product starts in the development stage, during which the original idea is transformed into a prototype and its marketing strategy is worked out. This is followed by the introduction stage, characterized by low sales: buyers are unsure about the product and it is not stocked by all distributors. In this stage the product is adapted as customers provide feedback. Sales can be increased by introductory price offers and advertising support. If purchasers are satisfied with the product, its reputation will spread and it will enter the growth stage: the product will become more widely available and sales will increase. Competitors' versions will then appear and eventually the maturity stage will be reached, in which supply and demand are matched and sales stabilize. The maturity stage is the longest period, characterized by intense competition. In this stage there will be an operational emphasis on reducing the costs of production in order to maximize returns, but eventually a better way of satisfying consumers' needs will almost certainly be provided by another new product and the decline stage will be entered. The important skill in this stage is to know when to leave the market. The duration of each stage is unique to each product. In practice, many new products will not survive beyond the introduction stage. The concept of product life cycle underpins the strategic management concept of product portfolios.
Product life cycle. Sales and profits rise during the growth and maturity stages but subsequently decline.

Big dictionary of business and management. 2014.

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