Introduction
It has been a well-established idea for many years that most of products follow a life cycle like living organisms passing through a cycle from born to death, but product life cycle itself is not unmanageable, and it depends on market actions very much. Appropriate management and strategic options can alter the shape and duration of a brand's life, which can result in the increase of current rate of sales.
The theory breaks the economic life of a product into a number of stages (four or five being most common) that is from introduction stage, growth, and maturity to decline stage. To say a product has a life cycle, Kotler (2000:303) asserts four things: "products have a limited life; product sales passes through distinct stages, each posing different challenges, opportunities and problems to the seller; profits rise and fall at different stages of the product life cycle; products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage of their cycles."
Economic Growth
Product life cycle (3 charts)
Image of the four major product life cycle stagesThe new product is developed and launched into market where it takes time to gain acceptance and thus the initial sales growth is slow. If the product is accepted by the market, and achieved a critical mass of sales, the growth phase starts during which sales growth is normally rapid. The ultimate demand for any product will not be infinite and in time the rate of growth will slow as all potential customers have entered the market and a normal rate of usage has been established. Once a more stable position has been established with sales demand relatively balanced by available capacity, the industry can be described as having passed into the maturity stage of the life cycle. Eventually the demand for the product will start to decline because alternative substitute products have been...