Product life cycle is an important concept of marketing which shows the stages through which a product passes in its entire lifecycle. The different phases of a product life cycle including introduction to growth, maturity and decline depends upon the situation of the market and affects the marketing strategy and marketing mix accordingly.
The four stages of a product life cycle are:
This is the stage first stage of the product life cycle in which the product is introduced to the market and has low growth rate. If the product is entirely new to the market and meets the need of the customers, then monopoly can be created. In the introduction phase, usually there is loss instead of profit due to heavy investment in promotional activities to make the customers aware of the product, especially if the newly launched product belongs to a new product class.
A product reaches to the growth stage once the product is acceptable to the customers. This is the profitable stage but to retain the monopoly, it is very necessary to modify the product with new ideas and innovations. Growth stage is the best phase for a company to come with new product in the product class to create an image of the product and prevent them from being copied by the competitors.
Maturity is the end stage for growth stage as the sales growth starts declining as the customers are already accepting the product and there is also increase in the number of competitors. Though, there is good sales growth in the initial phase of the maturity phase but that slows down and starts declining due to aggressive competition in the market. Maturity stage is the most vital phase of the product development process.
This is the last stage of product life cycle (PLC) in which the product class ends due to extreme decline in the sales growth rate. This usually happens due to large number of competitors sharing the same market that makes it very difficult to retain the sales growth. In addition to that, the product may be considered 'old' by the customers due to entry of other product class in the market./p>