Product Life Cycle

Businesses decide to introduce a new product when sales when sales of existing products are declining. A new product can increase market share by either appealing to a different age range to its main target or by appealing to everyone because it is new. For example, products such as televisions or computers are constantly changing due to updated technology, therefore newer products are more highly demanded, and therefore it is easier to market to market them. By saying that the product offers newer technology and better designs, the customers are immediately drawn towards it. Introducing a new product to any business is expensive, and runs a risk to the company. This is because even before the new products is created; the research and development department has to research into the needs and wants of the consumers. If they fail to do this all correctly, or if another rival firm brings out a similar or better product, then all the money spent on research and even advertising would have been wasted. If this were to happen, the business would have to consider making staff redundant or declare them selves bankrupt!
Join now!


Every product has its own life cycle, and there are four stages of this life cycle, illustrated on the graph below:

A. Research and Development

B. Introduction

C. Growth

D. Maturity

E. Decline

Point A is the point before the new product is introduced to the market. This is where the Research and Development department does their thorough market research. This helps them gather the needs and wants of the public and whether do create the product or not.

On points B-C the cash flow rises as the novelty of ...

This is a preview of the whole essay