The Product Life Cycle

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

    • Pre-introduction phase: involves research and development activity and general planning prior to the launch of a new product.

    • Introduction is a period of slow sales growth as the product is being introduced in the market. This is the most expensive stage in the history of the product. The costs of research, both technical and marketing, have to be borne, the product is not yet contributing revenue to the business and there is the risk of failure. Profits are non-existent in this stage because of the heavy expenses of product Introduction phase: involves limited distribution and an emphasis on awareness in promotional activity. Price can be pitched either at a relatively low level to gain maximum adoption of the new product in the shortest possible time, or at a relatively high, premium level, to cream off the benefits of having a superior new product.

    • Growth is a period of rapid market acceptance and increasing profits. The product is establishing itself in the market and sales are increasing over time. maximizing sales and market; emergence of new competitors; price more competitive; product differentiation—new brands and product; advertising emphasizes mass communication while distribution emphasizes reaching out extensively as far as possible.

    • Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. At this stage, competition increases as rival firms fight for a bigger share of the market. Profits level off or decline because of increased marketing outlays to defend the product against competition. Increase advertising and sale promotions. market development and product development.

    • Decline is the period when sales fall off and profits drop. maximizing sales and market; emergence of new competitors; price more competitive; product differentiation—new brands and product; advertising emphasizes mass communication while distribution emphasizes reaching out extensively as far as possible.