What Are the Stages of Product Life Cycle Management?
Based on a company's understanding of the above-stated assessments, managers begin to develop distinct stages that products enter in order to meet each challenge corresponding to each stage. Therefore, management teams that study product life cycles state that products go through four major stages of life. They are:
Stage 1: Market Introduction Stage
Due to the introduction of a new product, management expects that sales will be low and cost will be high at this initial stage. Also, the company is focused on creating a “buzz" around the product so that customers will try it out. There is also very little competition, initially, at this level.
Stage 2: Growth Stage
As awareness is created around this new product, the sales volume increases dramatically. Profitability begins to increase as the cost factor is reduced. Also, competition begins to drive the price down, as there is now competition from other companies to get a “piece of the pie."
Stage 3: Maturity Stage
Due to the increase from competitors entering the market, uniqueness of brand and/or product features become key. Companies must differentiate their brands in order for their products to stay relevant with consumers. Sales volume peaks at this point, and there is product saturation of the market. The price continues to drop due to the competition of other brands. Cost also lowers, due to production volume increases.
Stage 4: Saturation and Decline
At this stage, sales becomes stabilized or even decline. Profitability decreases, as does price. The product may be losing some of its relevancy with consumers.