The Product Life Cycle
Business: Edexcel IGCSE, topic 4.3.5
The Product Life Cycle
The product life cycle is the series of stages that a product goes through over its lifetime. Not all products last forever. They start somewhere and most products and services experience a fall in sales after a certain period of time. The stages of the product life cycle are:
Research and development
- Research and development is the stage before a product has actually been made.
- Businesses will invest in researching a certain area of the market and if they discover a business opportunity, they may then take the time and resources to develop a product or service that fits a gap in the market.
- A pharmaceutical company may invest into researching a certain disease to see if there is a drug that might help cure it.
Introduction
- The introduction is the stage where a business introduces or launches the new product (or service) to the market.
- Marketing and advertising are important in this stage of the product life cycle because a business needs to find a way to let consumers know what the product is and that the product exists.
Growth
- Successful products often undergo a period of growth as more and more customers discover and buy the product.
- In the early days, just after introduction, the rate of growth tends to increase.
Maturity
- At this stage, the number of new customers buying the product has slowed down and the market for the product can be considered mature.
- But sales of the product are still rising, just less quickly than before (they are rising at a decreasing rate).
- People grow a lot less between the ages of 13 and 18 when compared to age 1 and 6.
Saturation
- At this stage, the sales of the product have reached its peak and no longer increase but remain steady.
- Essentially all consumers who want the product or service have bought or acquired it.
Decline
- Changes in fashion, consumer tastes/preferences, technological advances and new competition offering similar products can all mean that the demand for a product begins to fall.
Test yourself on The Product Life Cycle
At which stage of the product life cycle are marketing and advertising most important?
The Product Life Cycle