Product life cycle

The next stage is Introduction or Launch this involves promoting your product in order to make the public aware of it.  In the case of our own ice cream business we have designed ice cream posters, which we have put around the school so that all students know when we will have our sale.  We also gave out letters to form teachers so they could read out to their form class that there would be an ice cream sale on Thursday 29th September.  Sales would be slow at this point but would increase dramatically because of the low cost goods.  Expensive products like new cars would be slow to sell at first because the car has not been proved as reliable as yet.  The product would not be in a profit-making position at this stage because sales would not yet cover the cost of the research and development stage as yet.

Growth is the third stage in the product life cycle.  Sales grow rapidly at this stage, as people are aware of the product and a lot of people would have tried it and customers will start to become loyal to the product.  Sometimes the price may be reduced at this stage to try and surpass competitors.  The increased sales will put the product into a profit-making position and cover the costs for the earlier research and development stage.  In the case of our ice cream business our customers will be aware of our product because of our advertisements and are posters around the school.  People would have already tried our product and we will continue to buy it.

Maturity is the fourth stage of the product life cycle.  This means the product is established in the market.  High levels of sales have been maintained however at this stage it is difficult to increase sales any further although the company may attempt to advertise their product once again.  Profits at this stage are at their highest.  Our ice cream business would be at this stage if everyone is happy with it and are continuing to buy it.

Saturation is the fifth stage of the cycle.  At this stage there are unlikely to be any new competitors.  Sales have been pushed as far as they can go.  Some may be attracted to the low or discounted prices but new customers are unlikely.  Profits at this stage may still be good at this stage but not be growing.  If our ice cream business was at this stage we may have to get ready for our products drop out of the market and try to sell the remaining goods.

The final stage of the cycle is the Decline.  This is the final stage for the product and sales have fallen so that the business is not making enough money to cover the manufacturing costs therefore the business is unprofitable.  At this stage the product would be withdrawn from the market.  Businesses that have prepared for this stage will have a second product ready for introduction into the market after the first one is withdrawn.  If our ice cream was in this stage we would be looking to introduce a new flavour of ice cream into the market or even a new product of ice cream altogether.