What is the concept of the product life cycle?

Introduction Stage

In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:

*Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained.
*Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
*Distribution is selective until consumers show acceptance of the product.
*Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.

Growth Stage

In the growth stage, the firm seeks to build brand preference and increase market share.

*Product quality is maintained and additional features and support services may be added.
*Pricing is maintained as the firm enjoys increasing demand with little competition.
*Distribution channels are added as demand increases and customers accept the product.
*Promotion is aimed at a broader audience.

Maturity Stage

At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.

*Product features may be enhanced to differentiate the product from that of competitors.
*Pricing may be lower because of the new competition.
*Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
*Promotion emphasizes product differentiation.

Decline Stage

As sales decline, the firm has several options:

*Maintain the product, possibly rejuvenating it by adding new features and finding new uses.
*Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.
*Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.

An item is planned to last ? number of years.
eg
A cheap electric toaster is priced and made to last 12 months and be dumped.
A good expensive toaster is designed and priced to last years.

I don't think it is much simpler than that to explain, if you check the prices of toasters or any other thing.

You pay the money and take your chances.

The Product Life Cycle (PLC) describes the stages a new product idea goes through from beginning to end. The PLC is divided into five major stages:

- Product Development
- Market Introduction
- Market Growth
- Market Maturity
- Sales Decline

Total sales of the product, by all companies in the industry, vary in each of the five stages. They move from zero in the product development stage, very low in the market introduction stage, to high at market maturity and then back to low in the sales decline stage.

It's like a graph of time against sales for a particular product. There are five stages.

Introduction, growth, maturity, market saturation, decline.

A products life can be extended using methods such as remarketing and repackaging.

Almost like a living organism a product will go through several stages in its life. It is born (introduction), grows up (growth), ages (matures), deteriorates (declines) and eventually dies.

The introduction stages marks the true birth of a product. The good or service had been planned out beforehand, and it is now hitting its intended market for the first time.

During the growth stage the product's marketing is prevalent. Consumer awareness is growing and sales are increasing at a given rate (depending on countless factors such as the nature of the product and seasonality).

As a product ages its growth is not as rapid as initially intended. It is not as popular as it used to be and there may less demand for the product than before.

In the decline stage, the product is nearing death!!!!! There are fewer and fewer sales and it is the company's responsiblity to decide whether or not to try and revive the product through product development or let die off because it is costing too much money.

Introduction - A new product is launched into the market
Growth - The product gains popularity and sales and production rise etc.
Maturity - The product reaches it's highest point
Decline - Sales and production fall as the product goes into decline.

Market research is often included before introduction, but not when i was taught it.

The product life cycle is a set of stages that products go through from introduction of a new product through the decline stage.

The stages appear in the order of:
1) Introduction Stage - The product is first introduced and sales of the product are low.
2) Growth Stage - This is where the sales of the product take off. This is when people see the highest growth in revenues.
3) Maturity Stage - This is where the product is most profitable. Sales do continue to increase but at a reduced rate.
4) Decline Stage - Sales and revenues start to decline due to market saturation.

This information was obtained at http://www.netmba.com/marketing/product/lifecycle/

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