Product life cycle
A product life cycle consist of 4 stages through which a product passes that is *introduction *growth*maturity*decline. the figure shown previously represent sales and profit associated with each stage and some practical example of products are also shown on it.
1. Introduction
At this stage, sales begin and profit goes from –ve to +ve. In this stage ,the demand is low .because the costumer don’t know much about the product. The organization has to invest heavily in advertisement to make the product familiar to the costumers. the volume sales are low,and if proper care is not taken, there is chances to product failure.
2.Growth
The product next enters a stage at rapid growth. Early in this stage (due to acceptability of the product by the costumer) there is drastic jump in sales and profit rise. It is because of limited or no competition. During this stage the mandate for operation is somehow to keep up with demand; efficiency is less of concern.
3.Maturity
During this stage, sales level off and profit begins to decline. New competition create to cut costs and ultimately on unit profit margin. Now operation must stress on efficiency, although marketing can ease the pressure by intensifying to differentiate the product.
4.Decline
At last the existing product enters to a declining stage and becomes obsolete. Either demand despisers or a better less expensive product.
Life cycle suggest when to eliminate the existing product and introduce a new one. This life cycle varies greatly from product to product. For example it took 15 years for “Xerox” to introduce electrostatic copy m/c .in contrast and computer and microchip industry, products become obsolete in months.
A product life cycle consist of 4 stages through which a product passes that is *introduction *growth*maturity*decline. the figure shown previously represent sales and profit associated with each stage and some practical example of products are also shown on it.
1. Introduction
At this stage, sales begin and profit goes from –ve to +ve. In this stage ,the demand is low .because the costumer don’t know much about the product. The organization has to invest heavily in advertisement to make the product familiar to the costumers. the volume sales are low,and if proper care is not taken, there is chances to product failure.
2.Growth
The product next enters a stage at rapid growth. Early in this stage (due to acceptability of the product by the costumer) there is drastic jump in sales and profit rise. It is because of limited or no competition. During this stage the mandate for operation is somehow to keep up with demand; efficiency is less of concern.
3.Maturity
During this stage, sales level off and profit begins to decline. New competition create to cut costs and ultimately on unit profit margin. Now operation must stress on efficiency, although marketing can ease the pressure by intensifying to differentiate the product.
4.Decline
At last the existing product enters to a declining stage and becomes obsolete. Either demand despisers or a better less expensive product.
Life cycle suggest when to eliminate the existing product and introduce a new one. This life cycle varies greatly from product to product. For example it took 15 years for “Xerox” to introduce electrostatic copy m/c .in contrast and computer and microchip industry, products become obsolete in months.
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