At some time, a product’s rate of sales growth will slow down and the product will outer a stage of relative maturity. The maturity stage is divided into three phases. In the first phase, growth maturity, the sales growth rate starts to decline. There are new distribution channels to fill. In the second phase, stable maturity, sales flatter on a per capita basis because of market saturation. Most potential consumers have tried the product, and future sales are governed by population growth and replacement demand. In the third phase, decaying maturity the absolute level of sales now starts to decline and consumers starts to other products and substitutes.
The slowdown in the rate of sales growth creates overcapacity in the industry. This overcapacity leads to intensified competition. Competitors scramble to find and enter niches. They engage is frequent markdowns and off-list pricing. They increase their advertising and trade and consumer deals.