Various Stages of Product Life Cycle

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The classic model of a product life cycle has four basic stages: Introduction, Growth, Maturity and Decline. These cylces may be mitigated by product extensions, etc. in the case of a child's bed, utilizing new themes could continually place part of the line extension back into the growth market to maturity instead of allowing the whole line to decline. The various stages of the cycle are often explained as: Introduction this is a development stage, market growth is light, but may be dependent upon advertising dollars. The ROI is also dependent upon how much research and development, or how technical the product is. Products need monitoring, and at this stage they are expensive to market. Typically penetration price is used to initially establish a market, at times price skimming to recoup R&D costs. Growth Usually characterized by rapid growth in sales and profits due to increase in output, economies of scale, better pricing and the public's awarness of the product through word of mouth. Companies typically invest significant promotional resources again at this stage. Prices level and then fall; price match to beat competition. Maturation This is the most common stage for many products. Competition is intense as others have copied your idea. It takes more money to maintain market share in fact the balance of marketing and fiance are key here in order for the company to continue to be profitable. R&D costs should be recovered thus there should be more margin to drop

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