Topic 5.5 Product life cycle

What is product life cycle

The key stages of a product life cycle: launch, growth, maturity, decline

The stages of plc

Launch: product is introduced to market, slow sales, and little profit

Growth: product gradually gets accepted in market, diffusion starts to occur, increased sales and profit

Maturity: sales peak but remain steady, maximum profit is achieved

Decline: market saturation occurs, and sales start to decline as well as profit

Obsolescence

Planned: when a product becomes outdated as a conscious act to ensure the continuity of a market, or ensure safety factors and new technologies are developed into later versions.

Fashion: fashion and trend continuously change overtime, and so some designs and product become undesirable. However the concept of retro style does lead to the rediscover of older designs and products.

Functional: when products become outworn and outdated it, and the parts of the products are no longer viable or available, or when a viable service is no longer functional the product becomes obsolete.

Technological: when new technologies supersedes an existing technology, the existing technology quickly fallout of use. And consumers use new technologies.

Product versioning/generations

A business practice where companies produce different models or the same design, for a different price.

Allowing a company to maintain a pioneering strategy and have consistent revenue stream.

Advantages and disadvantages of product versioning/ generations

• Improved customer choice: gives consumer a wide variety of choices to fit their needs

• Maximizes profit for company hopefully through increased sales.