PRODUCT LIFE CYCLE
The product life cycle shows separate stages in relation to the product’s sales history. A company needs to define the point the product is or will be at. Such an exercise helps in identifying marketing decision-making opportunities and problems. You can not predict the life cycle of a product accurately, but there is no doubt that each product has a life cycle. Generally, these stages are :
- Introduction or launch: This stage indicates a span of slow sales as the product is new in the market. In this stage, profits are virtually non-existent or very low.
- Growth: This is a stage when the product starts getting accepted in the market, sales go up, a product image is built and consequently profits go up.
- Maturity: At this stage, the product gets accepted by most of the targeted potential customers. Sales and profits go up until they reach a saturation point. Competition increases, the market becomes stagnant and profits stabilize or may even decline.
- Decline: In this stage, sales go down, profits go down and it is time for the organization to take hard decisions either to repackage or drop the product. In fact, an organization should initiate such actions at the saturation point stage itself and not wait for the declining stage.
Example
Take for example a new hill resort. Surely it will take some time to become a popular destination. During this time it will be visited by few tourists. When it is more popular the number of visitors will increase and when most tourists know about it and have paid a visit a stage will arrive. Some of these will pay regular visits while others will search for a new destination. It may be attributed to many factors, such as after being a popular destination; it is crowded like every other mass tourist destination and has lost its calm and peacefulness. The lifecycle phases, however, differ between product and product. Others will hit the maturity stage much sooner, some may take longer, and likewise, some may decline rapidly, while others may start at a saturation point for a long time.