11-17-2011, 01:32 AM
Basically the Product Life Cycle means the succession of strategies used by management as a product goes through its life cycle. A Typical Product Life Cycle consists of five basic stages.
New product development stage
In this stage expenses are so high and sales revenue become very low and margin of loss is very high.
Market introduction stage
In this stage cost of product is so high and sales revenue become very low and margin of loss is very high, just like new product development stage.
3. Growth stage
This stage is very fine for the growth as mentioned its name “Growth Stage”. In this stage costs reduced and sales volume increases significantly due to economies of scale. The company gains profit and prices is maximized market share.
Mature stage
This is a commanding stage in which costs are very low as we are well established in market & no need for publicity. Sales volume and profit is on peaks. Prices of the products tend to drop due to the proliferation of competitors.
Decline stage
This is the worst stage in all. In it sales volume decline and costs become counter-optimal. Prices and profitability of the product diminish.
To counter these ups and down advertising should be informative in the introduction stage, persuasive in the growth and maturity stages, and be reminder-oriented in the decline stage. Promotional budgets tend to be highest in the early stages, and gradually taper off as the product matures and declines. The first two stages, introduction and growth, are often seen as offensive in nature. The second two stages, mature and decline stage are often seen as defensive in nature. The defensive stage is sometimes called the armadillo phase because of that animal's defensive technique of hiding in its shell.
New product development stage
In this stage expenses are so high and sales revenue become very low and margin of loss is very high.
Market introduction stage
In this stage cost of product is so high and sales revenue become very low and margin of loss is very high, just like new product development stage.
3. Growth stage
This stage is very fine for the growth as mentioned its name “Growth Stage”. In this stage costs reduced and sales volume increases significantly due to economies of scale. The company gains profit and prices is maximized market share.
Mature stage
This is a commanding stage in which costs are very low as we are well established in market & no need for publicity. Sales volume and profit is on peaks. Prices of the products tend to drop due to the proliferation of competitors.
Decline stage
This is the worst stage in all. In it sales volume decline and costs become counter-optimal. Prices and profitability of the product diminish.
To counter these ups and down advertising should be informative in the introduction stage, persuasive in the growth and maturity stages, and be reminder-oriented in the decline stage. Promotional budgets tend to be highest in the early stages, and gradually taper off as the product matures and declines. The first two stages, introduction and growth, are often seen as offensive in nature. The second two stages, mature and decline stage are often seen as defensive in nature. The defensive stage is sometimes called the armadillo phase because of that animal's defensive technique of hiding in its shell.
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