Product Life Cycle

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Mwangi Kevin macharia 628945 The product life cycle theory is used to comprehend and analyze various maturity stages of products and industries. Product innovation and diffusion influence long-term patterns of international trade. This term product life cycle was used for the first time in 1965, by Theodore Levitt in a Harvard Business Review article: "Exploit the Product Life Cycle". Anything that satisfies a consumer's need is called a 'product'. It may be a tangible product (clothes, crockery, cars, houses, gadgets) or an intangible service (banking, health care, hotel service, airline service). Irrespective of the kind of product, all products introduced into the market undergo a common life cycle. To understand what this product…show more content…
As sales increase distribution channels are added and the product is marketed to a broader audience. Thus, rapid sales and profits are characteristics of this stage. | Maturity StageThis stage views the most competition as different companies struggle to maintain their respective market shares. The cliché 'survival of the fittest' is applicable here. Companies are busy monitoring product's value by the consumers and its sales generation. Most of the profits are made in this stage and research costs are minimum. Any research conducted will be confined to product enhancement and improvement alone. The manufacturer is constantly on the look out for new ideas, to improve his product and make it stand out among the competitor's products. His main aim is to lure non-customers towards his customer base and increase the existing customer base. Since consumers are aware of the product, promotional and advertising costs will also be lower, as compared to the previous stage. In the midst of stiff competition, companies may even reduce their prices in response to the tough times. The maturity stage is the stabilizing stage, wherein sales are high, but the pace is slow, however, brand loyalty develops, thereby roping in profits. | Decline StageAfter a period of stable growth, the revenue generated from sales of the product starts dipping due to market saturation, stiff competition and latest technological

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