Product life cycle

The product life cycle shows the sales of a product over time and consists of four main stages a product can be at during its life:

• Introduction: This contains new products that have just been launched - they are advertised heavily.
• Growth: The product is still new - discounts are still being offered and people are still purchasing the product as not many people may have one. There may be few competitors.
• Maturity and saturation: This is the first stage when sales stop increasing so rapidly. There may be more competition or other products which are preferred.
• Decline: Sales begin to rapidly drop. The product may have become out of date or out of fashion.

Extension strategies are used during the saturation and decline stage to try and extend the product's life cycle. These may include price reductions and other special offers. Sometimes companies may decide to target a new segment of the market as an extension strategy or develop an entirely new product.

The product life cycle is shown as a line graph and is useful to decide what marketing needs to be carried out for the product at different stages. It must be remembered that different products will spend different amounts of time at each stage of the life cycle.