What is Product Life Cycle and its importance

Updated: Feb 22

Product Life Cycle is the process a product would undergo during their existence in the market. It starts with;


  1. Launch

  2. Growth

  3. Maturity

  4. Decline

  5. Extension


Launch


This is the stage where a product is first introduced to the market. During this period, the product will likely experience slow sales. As such, a significant cost would be incurred from promotion of the product to create awareness.


Growth


Sales would pick up at this stage as promotion during launch increase acceptance of the product. Persuasive advertising will help further boost sales as brand loyalty develops. The product would start to generate profits for the firm and competition will increase as more firms join the market.


Maturity


At this stage, product sales would have peaked and experience a decline in sales growth. The product would have generated its maximum profit for the firm and largest market share possible. The market may also be saturated from intense promotion and competition between firms. This would discourage new firms from entering the market.


Decline


Sales are expected to decline rapidly at this stage as most consumers in the target market would have already purchased the product. Some firms may leave the market or develop new versions of existing products with improvements from feedback of customers.


Extension