Features Of Introduction Stage Of Product Life Cycle
1. Slow growth of sales
The introduction stage of a product life cycle starts once the product is commercially launched. This stage is characterized by slow growth sales. This is mainly because, buyers are not aware of the existence of the new product and they are reluctant to change their established buying habits.
2. Market pioneers buy the products
During this stage only a small group of consumers known as market pioneers buy the new product.
3. Small production level
The firm is unable to predict the success of the product in the market and keeps the production at a low level.
4. Technological problems
Since the product is new there may be several technological problems in the product.
5. Higher price
Price of the product tends to be generally high due to high costs of production, distribution and promotion.
6. Negative profits
Due to high costs and slow growth of sales profits from the product tend to be negative.
7. No competition
The innovator firm faces very little competition during this stage.
Features Of Growth Stage Of The Product Life Cycle
Many new products fail during the introduction stage because they cannot gain buyer acceptance, or are economically and technically unfeasible. If the product can cross the critical stage of introduction, it enters the growth stage.
Features Of Growth Stage Of The Product Life Cycle
Many new products fail during the introduction stage because they cannot gain buyer acceptance, or are economically and technically unfeasible. If the product can cross the critical stage of introduction, it enters the growth stage.
1. Sales increase rapidly
Sales increase dramatically during the growth stage of product life cycle.
2. New buyer groups
The early adopters continue to buy the new product and large number of new buyers from the early majority adopt the product.
3. Technological improvement and new features
The firm corrects technical defects in the production process and the product. It also adds new features and refinements on the product.
4. New market segments
The firm moves the product into new market segments.
5. Stable price and promotion levels
Prices tend to remain at introduction level or fall slightly. Promotion is also maintained at the previous level.
6. High profits
The high turnover and constant promotional costs give a high profit per unit to the firm.
Features Of Maturity Stage Of The Product Life Cycle
When the growth in sales down the product enters the maturity period. Initially, the product enters a growing maturity when the growth in sales is lower than in the growth period. When the sales stop to grow, the product enters the saturation stage. Ultimately, sales start to decline slowly in the declining maturity phase. For many products, the maturity stage lasts longer than other stages. During this phase the organization may face several problems and requires major modification in strategical and tactics.
Most products eventually enter the decline stage. The decline may be very rapid for some products while others may face lower decline. As sales start to decline, intelligent firms withdraw their products from the market. Those who continue, rapidly reduce their prices and try to attract price sensitive buyers, particularly the laggards. Eventually, all products reach a stage of zero sales.
Features Of Maturity Stage Of The Product Life Cycle
When the growth in sales down the product enters the maturity period. Initially, the product enters a growing maturity when the growth in sales is lower than in the growth period. When the sales stop to grow, the product enters the saturation stage. Ultimately, sales start to decline slowly in the declining maturity phase. For many products, the maturity stage lasts longer than other stages. During this phase the organization may face several problems and requires major modification in strategical and tactics.
1. Early majority and late majority are major buyers
During the maturity stage, the major buyer group constitute of the early majority and late majority. Although this buying group is very large in number they are mostly price sensitive and seek products at lower price with several benefits.
2. Tough competition
Attracted by the higher sales and profit during the growth stage many new firms enter into the market. As a result, the firm faces stiff competition from similar and substitute products.
3. Slower growth of sales
The competition and overcrowding of the market slows down the growth in sales. This usually creates over capacity in the production and marketing units.
4. Price cuts
Competitors reduce their price forcing the organization into price cuts.
5. Heavy promotion
The organization spends heavily in sales promotion to attract new buyer groups.
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6. Lower profits
The slow down in sales, higher marketing costs, and lower revenue result in gradual erosion of profits.
Features Of Decline Stage Of The Product Life Cycle
Most products eventually enter the decline stage. The decline may be very rapid for some products while others may face lower decline. As sales start to decline, intelligent firms withdraw their products from the market. Those who continue, rapidly reduce their prices and try to attract price sensitive buyers, particularly the laggards. Eventually, all products reach a stage of zero sales.
