Product life cycle involves five stages/ phases, which include introduction, growth, maturity, late maturity and decline phase. The phases are discussed in details below.
Introduction. This involves the introduction of a new product in the market. The firm is usually faced with high advertising costs. This stage is very crucial to a firm since it will determine the amount of profit made in future. An example of a product in this stage is the 3D TVs. This is a new product in the market, which was not there before. The 3D TVs are being advertised through the mass media like televisions, radio and newspapers. The advertisement is targeting the rich and the technology-updated group of people.
Growth. This stage is characterized by high growth in the firm’s sales and profits. Advertisement is also made in this stage. An example of a product in this stage is the blue ray discs/DVR. The product was introduced sometimes back and it has its way into the international world. The firms involved are using the mass media to advertise and also the print media. They are targeting the technology-upgraded group of people and they are also using the internet.
Maturity. The stage is characterized by the company reaching its peak by achieving its highest profits and very high sales. The products in this stage are very popular in the market. An example of a product in this stage is the DVD. The product is saturated in the market and the firms producing are trying to improve the product to make more sales. For instance, the DVD firms are trying to come up with rewritable discs and even DVD players that can be used to play music in flash form or even from memory cards. The firms are advertising through the print and mass media. They are targeting the middle class people since the prices of the DVDs are reasonable.
Late maturity. This stage is characterized by stagnation in the amount of sales and profits. The increase in sales is relatively small. The profits are increasing but in a decreasing rate. The firm on this stage tries to do all what it can to do to improve the quality of the product in order to sell more. DVDs can also be viewed on this stage, with an introduction of the blue ray discs recently. The firms producing the DVDs are trying to sell more product by aggressive advertising on print media and mass media targeting the middle class group of people who are not very reach.
Decline. This stage is characterized with decline in sales and eventually profits of a company. It reaches a point that almost every person in the market has the product. The firm still makes some efforts to see the product that sells. It improves the product and still advertises. The firm also tries to reduce the production cost so as to reduce the selling price of the product and thus sell more. This sometimes works and the firm sells more but still the overall sales decreases.