Four stages of product life cycle

The product life cycle has four stages: introduction period, growth period, maturity period and decline period.

1, lead-in period

When new products are put into the market, they enter the introduction period. At this time, customers still don't understand the products, and almost no one really buys the products except a few customers who pursue novelty. At this stage, the production batch of products is small, the manufacturing cost is high, the advertising cost is high, the product sales price is high, and the sales volume is extremely limited, so enterprises usually cannot make profits.

2. Growth period

When the product enters the introduction period and the sales are successful, it enters the growth period. This is the stage of demand growth, with demand and sales rising rapidly, production costs falling sharply and profits growing rapidly.

Step 3: mature

After the growth period, with the increase of the number of people buying products, the market demand tends to be saturated and the products enter a mature stage. At this time, the sales growth rate is slow until it turns down. Due to the intensification of competition, advertising costs have increased again and profits have decreased.

4. recession

With the development of science and technology, the appearance of new products and substitutes, and the change of consumption habits, the sales volume and profit of products are declining, and products are in a recession. The demand and sales of products have dropped rapidly, and at the same time, substitutes and new products have appeared on the market, which has changed the consumption habits of customers.

Importance of product life cycle:

Life cycle is a very important concept, which is directly related to the formulation of enterprise product strategy and marketing strategy. If managers want to make their products have a long sales cycle, so as to earn enough profits to compensate for all the efforts made and all the risks suffered when launching products, they must seriously study and apply the product life cycle theory.

Product life cycle is also a powerful tool used by marketers to describe the way products and markets operate. However, in the process of making marketing strategy, the product life cycle seems to be a bit inadequate, because the strategy is not only the cause of the product life cycle, but also the result of the product life cycle. The current situation of the product can make people think of the best marketing strategy, and the application of the product life cycle in predicting product performance is also limited.