What are the Stages of a Product Life Cycle?
In marketing, any product offered for sale goes through a series of stages called a product life cycle. As a product reaches each of the stages of a product life cycle, marketers adjust how the product is priced, promoted, and distributed. There are four stages of a product life cycle: introduction, growth, maturity, and decline.
The introduction stage starts before the product is even released. The company advertises in an attempt to create a demand for the product. The product may be released in only select areas at first so the company can see if it is accepted before spending a lot of money on state, national, or worldwide distribution. A common example of this are movies, which often run in select theaters before being released everywhere. At the introduction stage, the price can either be low to make the product more accessible to buyers or high to try to recoup the cost of development.
At this stage, most of the marketing is aimed at early adopters, people who always want to try the newest gadget or product. Reviews by new adopters can help sway the opinions of more cautious consumers. If sales do not go well at the introductory stage, the product may be discontinued without ever undergoing the other stages of a product life cycle.
During the growth stage, the company tries to increase its share of the market, meaning it tries to entice people who were going to buy a television, for example, to buy the new model the company has released. To do this, the company may add new features and services to the product. It will widen the distribution and create advertising that is aimed not just at early promoters, but at the rest of the world as well. Sales figures tend to grow steadily during this stage of the product life cycle.
The maturity stage marks the end of strong sales growth. The company may be forced to lower its prices to compete with similar products released by other companies. Advertising will attempt to emphasize differences between the company's product and other similar products. In some cases, the company may offer incentives or special promotions to encourage people to choose its product over the others in the market. This is usually the longest of the stages of a product life cycle.
The last of the stages of a product life cycle is the decline stage. At this stage, sales begin to decrease. In some cases, the company will cut its loses and discontinue the product. The company may also choose to reduce the cost even more and continue to sell the product or to add new features and find new uses for it.
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