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Product Life Cycle Stages Explained

Characterization of life cycle

The life cycle of a single product characterized by a period of sales of goods – from first to last. For each product it individual. However, most of the products the company seeks to extend its life cycle, using a typology of marketing and specific features of the product and the market.
The duration of the product life cycle depends on:
1. technical complexity: the more complex the product, the greater its life cycle;
2. the volume of investment in product development and sales and marketing network;
3. the presence of competitors: the more, the more aggressive their policy on the market, the shorter product life cycle;
4. the quality of marketing research and their degree of conformity with the interests of individual groups of customers

Types and curves of the product life cycle

Our standard product life cycle goes through the stages of introduction, growth, maturity and decline as we can see with the diagram below. However not all products follow the standard product life cycle and will have a very short life or stay in the maturity stage and not progress to the decline stage.

Product Life Cycle Stages Explained

The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products.

Introduction Stage – This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector.

Growth Stage – The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage.

Maturity Stage – During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage.

Decline Stage – Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets.