Life Cycles of Products Essay

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Life Cycles of Products The definition of a product is "anything that is capable of satisfying customer needs", this includes both physical products, like cars, cell phones, machines, as well as services like banking, and insurance. Businesses manage and modify their products over time so that they constantly meet the changing demands of their customers, the methods used to manage a number of brands and product lines is known as Portfolio Managing. The different stages through which these individual products develop in time in terms of the sales they generate is known as Product Life Cycle.

A product life cycle
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At this point, the sales generated are usually low and the profits are typically low or none at all. Due to the fact that the company is paying a lot for advertising and brand building, the customer pays a high price for the product. This stage is also characterized by high distribution costs. At this point of time the product offered is still in its most basic form. A good example of a product in this stage currently is the new DVD Writer for computers, which enables users to store up to five times more information as compared to a compact disc. Currently, they are extremely expensive, the speeds at which they can be "written" at are relatively slow compared to the traditional compact disc. There is also a heavy advertising campaign by manufacturers in all computer stores.

The second stage is known as the Growth Stage. This stage is mainly characterized, for successful products, by a tremendous increase in sales. New customers are added while existing customers are making repeated purchases. By now however, competitors have introduced similar products, with a large number of sales and competitors the price is lowered to make the product more attractive for potential buyers. This is one of the tools of a system that is used in this stage known as Product Differentiation, where the marketing strategy is implemented that seeks to create a difference in

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