The process by which products emerge, grow, stablise and decline over time.
What are the stages of the product life cycle ?
Development and Research, Introduction, Growth, Maturity and Decline
What does development and research involve?
This is costly and time consuming period as prototypes have to be developed and tested. No revenue is generated.
What happens in the development and research stage ?
Think of an idea for market research anaylse the data find finance for product find out if product can be produced/technically possible produce a prototype test market change product if neccessary advertise the product for launch
What is the introduction stage ?
Growth is slow and sales are low because of limited consumer awareness of the product. May be difficult for business to persuade consumers to switch brand loyalties. There is high costs for holding stocks and advertising.
What is the growth stage ?
Consumers become aware of the product, sales increase. Little competition on the market and product earns highest unit profits.
What is the maturity stage?
Fully established product is faced with competition from other contenders for share of the market. May be forced to cut prices which result in profit loss.
What is the decline stage ?
Competition is fierce and brands are being forced to drop out of the market. New technology of new products means consumers will switch.
In what way could you extend the product life cycle ?
Changing or modifying the product formulation new variants changing the product to appeal to a different market. altering the channels of distribution changing prices promotion and advertising