EDUCATION 101: Principles of Marketing

The Product Life Cycle


The Product Life Cycle


At this stage, the market is developing, the product sales are zero and profits are zero.


This is the stage where the product gets into the market. At this stage, profits are negative because of low sales and heavy distribution and promotion expenses. Competition is low because few competitors sell similar versions of the product.


It is marked by rapid increase in sales and profits. The implication is that the majority of consumers have not adopted the product and production costs are still high. Since this is the stage that is the most attractive in the product life cycle, competitors are attracted into the market. The increased competition lead to wider distribution and factory costs of operation may rise.


The stage where the market gets to a mature stage that is the customers are well aware of the product being sold in the market . The rate of growth in sales will slow down as production matures That’s the level of sales and profits will increase but at a declining rate. Profits may level out.


The last stage in the product life cycle. Sales decline due to over capacity, technological advances , differing tastes and prefferences. The result of this is erosion of profits and firms may close down. Marketers should thus use strategies to extend the product life cycle.


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