Question

Mention the various stages of 'Product Life Cycle'.

Answer 1

1. Introduction Stage: After research and development, the new product will be launched in the market. Cost incurred in launching the product will be high and sales may be low. Since the product is of a new variety, competition is virtually absent, market is limited and prices are relatively high. This stage is also very risky because a high percentage of new products fail during this period. Effective strategies like introductory offer, money-back guarantee, removing technical and other deficiencies etc., may be employed.
2. Growth Stage: Sales increase and competitors enter the market. Having covered its research and development costs the product becomes profitable. In this stage, promotional focus shifts from "buy my product to buy my brand". Strategies like heavy advertising, expanding distribution channels and keeping the price at competitive levels may be employed.
3. Maturity Stage:  During this stage, sales continue to grow but at a decreasing rate and markets get stabilised. Falling prices will reduce profits. Producers attempt to differentiate products, and brands are key to this attempt. The market reaches saturation.
4. Decline Stage: Sales falls down sharply and product becomes obsolete. Either more innovative products are introduced, or consumer tastes have changed. Most firms shift their attention to other products. For example, the market for black and white TV in our country has declined.