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Product Life Cycle
Transcript of Product Life Cycle
It refers to the succession of stages a product goes through.
Product Life Cycle
This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector.
Market Introduction Stage
The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage.
During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage.
What is the difference between Product Life Cycle and Product Life Management?
It is a process that parallels the product life cycle
Decline or Stability Stage
Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets.
Stages that mirror the five stages of Product Life Cycle
1. Market Crystallization - latent demand for a product category is awakened with the introduction of the new product.
2. Market Expansion - additional companies enter the market and more consumers become aware of the product category.
3. Market Fragmentation - the industry is subdivided into numerous well populated competitive groupings as too many firms enter.
4. Market Consolidation - firms start to leave the industry due to stiff competition, falling prices, and falling profits.
5. Market Termination - consumers no longer demand the product and companies stop producing it.
Lessons of the Product life Cycle
The most important aspect of product-life cycle is that, even under normal conditions, to all practical intents and purposes they do not exist. In most markets the majority of the major brands have held their position for at least two decades. The dominant product-life cycle, that of the brand leaders which almost monopolize many markets, is therefore one of continuity.
Thank you for
Threcia Mae L. Emperado