Product Life Cycle

The product life cycle is the term given to the stages that a product passes through on its natural 'evolution' from development through to final decline. The usual stages are:

• Development - before the product even comes to the market, it must be developed and tested. This costs money, but there are no sales to offset the cost.
• Introduction - when the product is first brought to the market. It may take time for sales to pick up, and there may be heavy promotion costs, so it is unlikely to make money.
• Growth - the market picks up, the product should move into profit.
• Maturity - this is now a popular product, with good sales and reasonable profits. The profits act as a signal for competitors to enter the market, leading to
• Saturation - when there are many different products of the same kind to choose from.
• Decline - when the demand for the product tails off.

The graph for this product life cycle can be seen in the Paperless School.

Businesses may use extension strategies to try and keep the product at the maturity stage for as long as possible. These are techniques such as repackaging, advertising and promotional campaigns, and small changes to the product.