Product lifecycle

• The product lifecycle is a theoretical model which describes the stages a product goes through over its life
• What are the different stages?

  development --> introduction --> growth --> maturity --> decline
• What are some ways to extend a products life?

  Lower price

  Change product

  Change promotion

  Reposition the product

  Look for other alternative distribution methods

  Develop new market segments
• What are the weaknesses of product lifecycles?

  The shape and distribution of the cycle varies from product to product

  Strategic decisions can change the life cycle

  Length cannot reliably predicted

  Decline is not inevitable

  Difficult to recognise where a product is
• Explain the development (and research ) stage of the product lifecycle?

  Often complex

  Absorbs significant resources

  May not be successful

  Involves long lead-time before sales achieved
• Explain the introduction stage of the product lifecycle?

  New product on the market

  Low compacity utilisation

  High unit costs, low level of sales

  Heavy promotion

  Fast growing sales, constantly being positive
• Explain the growth stage of the product lifecycle?

  Rise in capacity utilisation

  Unit costs fall, with economies of scale working
• Explain the maturity stage of the product lifecycle?

  Slower sales of growth

  New competitors and a fight for market share

  Prices and profits fall

  Cash flow positive
• Explain the decline stage of the product lifecycle?

  Falling sales, market saturation

  Decline in profits and weaker cash flow

  More competitors leave the market

  Decline in capacity utilisation
• What are the weaknesses of the product life cycle?

  Hard to determine where products are

  Declined are inevitable

  Doesn’t fit all products