Product Life Cycle

Question 1

Product life cycle

Answer 1

Here’s an explanation of the Product Life Cycle model in simple terms:

What is a Product Life Cycle?

A product life cycle is the journey a product takes from its creation to its eventual withdrawal from the market.

The 4 Stages of a Product Life Cycle:

1. Introduction: The product is new, sales are low, and the company invests heavily in marketing and production.
2. Growth: Sales increase rapidly, new competitors enter the market, and profits begin to rise.
3. Maturity: Sales stabilize, prices and profits stabilize, and companies focus on differentiating their products.
4. Decline: Sales decline, profits fall, and companies eventually withdraw the product from the market.

Key Points:

• Not all products follow a classical life cycle.
• Companies can try to revitalize a product in decline by redesigning or rebranding it.
• The length of a product life cycle can vary greatly.
• At each stage of the life cycle, companies may adjust prices, costs, investments, and marketing strategies.

Example: Smartphone Life Cycle

The life cycle of a smartphone is relatively short, often less than a year. When a new model is announced, companies like Apple, Samsung, and HTC discount the price of their existing models to clear inventory and attract “bargain hunters”.