A Product Life Cycle

There are five stages in the product life cycle (PLC). First a product idea must be found and developed. During product development sales are nonexistent and money is pumped into developing a product for consumer sale. The second is when the product is introduced to the consumer or the introduction stage. During this stage sales are slow and promotion costs are high to inform consumers of the new product. Profit is low or nonexistent. Launch strategy should be chosen for the intended product positioning. If the product is intended to make large profits in the beginning it may lose long term steady profits for short time large profits. The company must choose a launch strategy in the beginning to ensure its intended product position. If all goes well, the growth stage will occur where sales will start to increase at a rapid rate. During this stage competitors will enter the market with hopes of making money. By introducing new product features the market will grow. Product prices fall slightly or remain the same. Profits increase and manufacturing cost decrease. Although giving up their current high profit, companies which continue to spend money on product improvement, promotion, and distribution hope to gain the dominant position in the market which will pay off in the maturity stage. During the maturity stage sales growth will slow and profits level off or decline because of increased marketing spending needed to compete with the competitors. Most products are in this category and marketing management needs to stay on top of the game during this stage. During this stage the weaker competition will drop out of the market. Companies may want to consider modifying the market which is increasing the current consumption of their product. They may also consider modifying th ...
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