Product Life Cycles Consist of Four Stages
The Product Life Cycle |
If we plot a product’s sales over its life in the market place, the resulting curve looks much like the "S" shape curve depicted in Exhibit 1. This is the product's life cycle and it can be divided into four distinct stages: introduction, growth, maturity and decline.
Introduction begins when the product is first made available for commercial sale. During the introduction stage the product's sales are relatively low and slow to accumulate because it takes time to roll the product into multiple geographic markets, convince wholesalers and retailers to stock and sell the product, and to generate sufficient levels of customer awareness, interest, and trial. Overall, demand generally remains low during this stage.
Eventually, as the product becomes more widely available and is adopted by more and more consumers, sales begin to grow at an increasing rate. It is at this point that the product has entered its growth stage. Sales continue to grow at an accelerated rate until the market approaches saturation i.e. the pool of potential customers for the product becomes depleted. As this saturation point is approached, the sales curve begins to tip over -- the rate of sales growth tends to decelerate. At this point, the product transitions into its third stage -- maturity.
Sales continue to grow during the first part of the maturity stage, although the growth rate is much slower than before. At some point during maturity, sales reach their peak. This peak will vary in duration, depending on the product category under consideration. For some product categories, such as automobiles, cigarettes, and refrigerators, sales may remain at their peak for decades.
The maturity stage is usually the longest phase of the PLC. As a result, most products at...