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Product Life Cycle
Shows the course that a product takes from its development to its decline in the market. Most products go through six stages in their life cycle: development, introduction, growth, maturity, saturation, and decline.
Development Stage
Incurs high costs with no revenue, focusing on prototyping, testing, and marketing preparation.
Introduction Stage
Involves high costs, low sales, heavy promotion, and more cash outflows than inflows as consumers become aware of the product.
Growth Stage
Sees increasing sales, rising profits, and higher cash inflows than outflows, with promotion still essential.
Maturity Stage
Sees peak sales and high profits, with slower growth and continued promotion to maintain market share.
Saturation Stage
Features intense competition, peak but declining sales, and possible price reductions to stay competitive.
Decline Stage
Sees falling sales and profits due to competition and reduced interest, prompting the need for a new or improved product.
Product Portfolio
The collection of products that a business offers, and it makes sense to time the life cycles so that the business can allocate resources effectively.
