Question

Discuss the concept of product life cycle

Answer 1

Solution-

Product life cycle is a process in which a product is introduced in the market, undergoes various stages till it becomes obsolete and is removed from the market.

There are generally 4 stages of the product life cycle-

Introduction, growth, maturity and decline.

Introduction- After the product is developed, the first process is introducing the product in the market. When it is released, it is at high stakes in terms of marketing and promoting it. The company invests the most of it in promoting the product so that it reaches into the hands of consumers.

It is that stage where the company gets a sense of how the consumer responds to the product. It is usually that stage where the producer spends the most without being assured of the gains from the sale of the product.

GROWTH- In this stage, consumers are aware of the product and demanding more of it. The product is famous and sales are increasing at a rapid pace.

It is in this stage, when the other companies start to observe the product and start to manufacture similar kind of product. Competition in the market arises and the parent company has to put in money for advertising and promoting its product to cut off the competition. Also, new features are being developed in the product. The company expands and its sales are increasing in it. More competition starts building in this stage and it pulls down the price of the product.

Maturity- When the product reaches this stage, it's sales tend to slow down or decline. Prices become competitive due to fierce competition by the other firms. The company has to put in large amount of money to advertise and promote to cut off the competition. The market eliminates those firms whose sales are stagnant and product is obsolete with no new feature. The market is reached at a saturated level and sales are maximized. Companies have to innovate to match with the on going public demand and dimensions.

​​​​​The maturity level may last long and very short depending on the product .

Decline- In this stage, sales are significantly reducing and prices are lowered due to very less demand. Though all the companies tend to keep their products alive in the maturity stage but this stage is certain.

Eventually the product is drawn out of the market if it doesn't incorporate new features in it. Marketing is not done at a large scale, only certain public is targeted. The product has to be re designed to be in demand otherwise it will be drawn out of the market. Eg- typewriters.

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