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Product Life Cycle Assignment Help

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A product in its lifetime goes through stages right from its introduction, growth, maturity and decline. The company’s position and strategy must change as the product, market and competitors change as the time progresses.

When we speak about the lifecycle of a product, then we say that

  • Products  have a limited life
  • Product sales pass through distinct stages, each posing different challenges, opportunities and problems to solve
  • Profits rise and fall at different stages of the product lifecycle
  • Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each lifecycle stage

The different Stages in Product Life-Cycle

  • Introduction: The product is introduced into the market. This is a period of slow sales growth. The company will not get any profits as the revenue is just enough to cover the heavy costs incurred to the introduction of the product.
  • Growth: A period of rapid market acceptance and substantial profit improvement. This is the period where the company will make huge profits. Many competitors are lured into the market with huge profits enjoyed by the first product.
  • Maturity: This is the stage where the product faces competition. Seeing the profits, competing firms enter the market with their version of the market. But, still the first company enjoys the position as the leader in the market. Slowly, the competition takes a serious turn as other firms make innovations to their versions and their sales start to increase. Seeing this the Pioneer company also starts to innovate and tries to get back the customers lost to other firms.
  • Decline: Sales decline for a number of reasons including technological advances, shifts in consumer tastes and preferences, increased domestic and foreign competition. There is overproduction, increased price cutting and profit erosion. As sales and profits decline some firms withdraw from the market. The companies which are present, they further decrease the costs and forgo profits. The management being optimistic tries to think that eventually sales will improve and continue to struggle in these precarious situations.

It is often difficult to improve the condition of a product in the decline stage. Companies adopt different strategies for the sales improvement.

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