Product life cycle
Posted in Business studies, The marketing mixThe product life cycle describes the life of a product - from the day it first goes on sale to when it's finally withdrawn from sale. Here is a typical product life cycle:
The Y-axis shows the sales of the product and the X-axis the time.
The product life cycle can be split into 5 sections (as shown on the graph):
- Introduction - the initial launch of the product, sales will be slow and costs high.
- Growth - sales start to increase as the product increases market share.
- Maturity - growth in sales starts to slow until they eventually level out at a constant rate
- Decline - sales begin to fall as new technology is released or consumer trends change.
- Withdrawal - the product is eventually withdrawn from sale completely
The length of a products life cycle can vary - from weeks (fashion) to centuries (beer, bisto, tobacco)
Extension strategies
In order to prevent the decline of sales or even initiate more growth in sales a business may employ an extension strategy. These can include:
- Attracting a wide audience - attracting customers who wouldn't usually buy your product to do so
- Alter the product - just changing the colour and style of a product can prevent a decline in sales
- Sales promotions - for example offering 50% extra free in food products
Different types of product life cycles
Some products do not follow the 'classic' life cycle curve - some products will fail whilst others will use multiple extension strategies.