Question

In this unit, we look at how innovations are commercialized, progressing through a common Product Life Cycle. What are each stages of the Product Life Cycle? What are the dominant characteristics of each stage?

Answer 1

Product Life Cycle

The product life cycle is a set of phases a product must go through. It starts from when the product is introduced to the stage at which the product is removed from the market. It is the processes through which the product is testing, promotion, growth, development and decline.

Stages of Product Life cycle

Following are the stages in Product Life cycle and and the dominant characteristics of each stage.

1. Introduction Stage : It is the first stage in product life cycle and it is the stage at which a new product is distributed in the market and make it available to the customers.

Characteristics of Introduction Stage

* Competitors are very low

* Sales are very low.

* Production is very low. Because, the unit cost is high.

* Profit is low due to sales are low.

* Marketing cost is high due to create new customer group and marketing activity.

2. Growth Stage: It is the second stage at whch the sales increases quickly. It is the point of Take off.

Characteristics of Growth Stage

* Sales increases the quickly

* Competition increases significancly.

* The cutomers become more price sensitvity.

* Production increases and the units produced are increasing.

* Profits are rised quickly.

3. Maturity Stage

In the maturity stage the product sales slows done and the market become saturated.

Characteristics of Maturity Stage

* Production and marketing cost rises because market saturation.

* Profits declines at this stage

* Competition is high

* Producers starts to leave from the market

2. Decline Stage: In this stage the consumer interest chages and product is out of market.

Characteristics of Decline Stage

* Profits become very low

* Customers switch their products