Product Life Cycle

Ever thought about how the things which we were 10 years ago changed? What product which was present 10 years ago, now not there ..? Why phones are released year after year? While cars may take many years for their new models?

Well recently, I had explained about the topic of how a new product is developed (Product Development Process:https://sahil-maheshwari.medium.com/new-product-development-process-1845b514b240)

After the new product is developed, it goes through several stages. However, the amount of years for the same varies according to the nature of the product. In the case of technology, we see how fast one could say it gets obsolete as better substitutes (faster, more efficient computers, smartphone etc.) are created.

Product development

It begins when the company finds and develops a new product idea. During product development, sales are zero, and the company’s investment costs mount.

Introduction

It is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction. During the same, we could see how there is very low demand in the market as early adopter try to buy the same. However, the majority of the population still remains unhinged.

Growth

It is a period of rapid market acceptance and increasing profits. Over this period the sales start to increase as there seems to increasing awareness among the consumer about the product.

Maturity

It is a period of slowdown in sales growth because the product has
achieved acceptance by most potential buyers. Profits level off or decline
because of increased marketing outlays to defend the product against
the competition. As soon as the product reaches it’s maturity, it begins to decline in the market as it’s sales start to drop. Different business competitors also try to create substitutes forcing the business to create new products.

Decline

It is the period when sales fall off and profits drop. Soon the product completes its lifecycle where the only sales it gets are from loyal customers who require, however the majority of the market moves on to the new type of products.