Product Life Cycles
Definition of 'Product Life Cycles'
The product life cycle is typically divided into four stages: introduction, growth, maturity, and decline.
* **Introduction** is the stage when a new product is first introduced to the market. During this stage, sales are typically low and profits are minimal. The goal of this stage is to create awareness of the product and generate early sales.
* **Growth** is the stage when a product's sales begin to increase rapidly. During this stage, profits also increase as the product becomes more popular. The goal of this stage is to gain market share and establish a strong brand.
* **Maturity** is the stage when a product's sales have reached their peak. During this stage, sales growth slows down and profits begin to level off. The goal of this stage is to maintain market share and keep profits high.
* **Decline** is the stage when a product's sales begin to decline. During this stage, profits also decline as the product becomes less popular. The goal of this stage is to phase out the product and introduce new products.
The product life cycle is a dynamic process and the stages can overlap. For example, a product may enter the growth stage before it has completely exited the introduction stage. The length of each stage can also vary depending on the product. Some products have a short life cycle, while others have a long life cycle.
The product life cycle is a useful tool for understanding how products perform over time. It can be used to make decisions about when to launch new products, discontinue old products, and allocate marketing resources.
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