A product life cycle (PLC) is the period from when a product is introduced into a market to when it declines or is removed from the market. The life cycle of a product is broken up into introduction, growth, maturity, and decline. The term is used by marketing and business development to help determine when they should make certain strategic business decisions.
There are four core stages of the product life cycle.
Once a product is developed, a company will focus on introducing the product to its target market. In this stage, the company will spend a lot of time and money marketing the product to begin generating revenue and increasing product awareness. It’s also in this stage that a company can begin to get a sense of what customers think of the product.
The goal of this stage is to build demand for the product and figure out what customers think of the product.
Once a product reaches the growth stage, consumers are already using and buying the product. The concept has been proven and begins to grow in popularity. Other companies may begin to become aware of the product, drawing in competition that results in the overall market expanding.
A company will continue to invest in research and development (R&D) and advertising to improve product features and functionality.
In the maturity stage, the sales for a product begin to slow as greater competition is introduced, driving the price of the product down and decreasing demand. A company will begin to focus on developing new products or enhancing existing ones to create new market opportunities.
Inevitably, the demand for a product declines. In this stage, product sales begin to drop off significantly and consumers change their tastes, opting for other products. This causes sales to deteriorate.
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