Stages of product life cycle
Before getting a final shape a product has to go through different stages. These stages of product development are known as product life cycle. These stages are:
Stage I Product development stage: the first stage of product life cycle is the product development stage, when the company develops a new product. Which means the product development process involving the process of Idea generation, Idea screening, Concept development, Market strategy development, Business analysis, Product development, Test marketing and Commercialization which we have discussed earlier.
Stage II Introduction stage: this stage of the launch of the product. At this stage as the product is new to the market so sale of the product is low and due to low sale the company has to spend heavy promotional expenses. So at this stage the profits are negative. At this stage the marketers decide the product pricing policy which they want to select. Different product pricing policy shown below:-
|
|
Rapid |
Slow |
|
Penetration |
Low price High promotion |
Low price Low promotion |
|
Skimming |
High price High promotion |
High price Low promotion |
Stage III Growth stage: this is the stage when the sale of the product starts increasing, Profit of the company also start increasing and consumer start liking the product. But to maintain this level the company is required to use different strategies. Like advertising the product, improving product quality, providing after sale services etc.
Stage IV Maturity stage: at this stage the product enters the stage of maturity. This is the longest stage than the previous stages. This stage covers three levels:
Level I Growth maturity: growth of product starts decline due to distribution saturation.
Level II Stable maturity: growth of product starts decline due to market saturation.
Level III Decaying maturity: growth of product starts decline due to consumers movement towards other products.
Stage V Decline stage: the last stage of product life cycle is the decline stage means when the sale of product starts declining. Decline in sale may be due to competition, change in consumer liking, technology changes etc. So to avoid looses it is better to stop the production of those products.
Thus, all these are the 5 stages of product life cycle through which the product goes.