Different Stages of a Product

A new product passes through set of stages known as product life cycle. Product life cycle  applies to both brand and category of products. Its time period vary from product to product. Modern product life cycles are becoming shorter and shorter as products in mature stages are being renewed by market segmentation and  product differentiation.

Companies always attempt to maximize the profit and revenues over the entire life cycle of a product. In order to achieving the desired level of profit, the introduction of the new product at the proper time is crucial. If new product is appealing to consumer and no stiff competition is out there, company can charge high prices and earn high profits.

Stages of Product Life Cycle

Product life cycle comprises four stages:

1. Introduction stage

2. Growth stage

3. Maturity stage

4. Decline stage

Product Life Cycle (PLC)

1. Introduction stage

Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through product development, involves prototype and market tests. Companies incur more costs in this phase and also bear additional cost for distribution. On the other hand, there are a few customers at this stage, means low sales volume. So, during introductory stage company’s profits shows a negative figure because of huge cost but low sales volume.

At introduction stage, the company core focus is on establishing a market and arising demand for the product. So, the impact on marketing mix is as follows:

Product

Branding, Quality level and intellectual property and protections are obtained to stimulate consumers for the entire product category. Product is under more consideration, as first impression is the last impression.

Price

High(skim) pricing is used for making high profits with intention to cover initial cost in a short period and low pricing is used to...