Traditional Culture Encyclopedia - Traditional stories - The life cycle of a product includes
The life cycle of a product includes
The life cycle of a product includes an introduction period, a growth period, a maturity period, and a decline period.
1, the introduction period
refers to the product from the design of the production until put into the market into the testing stage. New products into the market, it enters the introduction period. At this time, the product variety is small, the customer does not understand the product, in addition to a small number of customers in pursuit of novelty, almost no one actually buy the product. In order to expand sales, producers have to invest a lot of promotional expenses to publicize and promote the product.
This stage is due to the limitations of production technology, small batch size, high manufacturing costs, large advertising costs, high sales prices, sales volume is extremely limited, the enterprise usually can not make a profit, but may lose money.
2, the growth period
When the product into the introduction of the period, sales success, then entered the growth period. The growth period is the product through the trial sales effect is good, buyers gradually accept the product, the product in the market to stand and open up sales. This is the stage of growing demand, where demand and sales rise rapidly.
The cost of production has fallen dramatically and profits are growing rapidly. At the same time, competitors see profitable, will have to enter the market to participate in the competition, so that the supply of similar products increased, the price fell, the enterprise profit growth rate gradually slowed down.
3, maturity
The product into mass production and stable sales into the market, after the growth period, with the increase in the number of people buying products, market demand tends to be saturated. At this time, the product is popular and increasingly standardized, low cost and large production. Slow sales growth rate until the turn down, due to increased competition, resulting in similar products between the production enterprises have to increase in product quality, color, specifications, packaging services and other aspects of increased investment, to a certain extent, increased costs.
4, decline
is that the product has entered the phase of elimination. With the development of science and technology as well as changes in consumer habits and other reasons, product sales and profits continue to decline, the product has been aging in the market, can not adapt to market demand, the market has been other better performance, lower prices of new products, enough to meet consumer demand. At this time, the higher cost of enterprises will be due to unprofitable and stop production, the life cycle of such products will be the end of the end, and finally completely withdrawn from the market.
Theoretical significance of the product life cycle theory
1, the product life cycle theory reveals that any product is the same as biological organisms, there is a birth - growth - maturity - the process of decline, continuous innovation, development of new products.
2.
2, with the help of product life cycle theory, you can analyze and judge which stage of the life cycle of the product, speculate on the trend of future development of the product, correctly grasp the market life of the product, and according to the characteristics of the different phases of the marketing mix to take the appropriate strategy to enhance the competitiveness of enterprises, improve the economic efficiency of enterprises.
3, the product life cycle can be extended.
4, product life cycle used to explain the dynamic change of industrial manufactured goods has a certain practical significance, to explain the international trade has an important reference role. It guides people through the product life cycle, understand and grasp the dynamic changes in exports, for the correct formulation of foreign trade product strategy, market strategy provides a theoretical basis.
5, it reveals that comparative advantage is constantly in the transfer, each country in product innovation, or imitation of the introduction, or expansion of production, have to grasp the timing. By doing transnational business, you can take advantage of the favorable conditions at different stages and maintain your comparative advantage for a long time.
6, it also reflects the characteristics of contemporary international competition, that is, the ability to innovate, the ability to imitate, is an important factor in obtaining the viability and superior position of enterprises.
7. The theory focuses on analyzing the basis of international trade from the perspective of technological innovation, technological progress and technological diffusion, and puts the comparative interests in international trade in dynamic words, and studies the conduction of product export advantages among different countries.
Reference: Baidu Encyclopedia-Product Life Cycle Theory
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