Many products enter in market some lasts for long time and others disappears in a small span of time. This cycle of product birth and death in the language of marketing is known as product life cycle. Product life cycle consist of four stages namely introduction stage, growth stage, maturity stage and decline stage.
At each stage organization adopt different strategies to take the benefit of opportunities available as well as to minimize the threats.Every product have different life cycle from other some product resist for long time duration like Coca Cola and some products out of market within very short span of time like fashion which change with fast pace.
In this stage expense of products are high and profits are very low, organization focus on product quality for reputation, setting best prices that customer can afford, selecting appropriate distribution channels and promotion of the product.
In this stage the graph of revenues increase but profits are low due to the expenses on activities like promotion and distribution. Product pricing remain stable to capture the market share. New features are added in the product to attract new customers and retain the existing one, the competition is low at this stage as not much activities are noticed by competitors.
In this stage customer sales reach to saturation level, competitors come up with the aggressive strategies which directly impact organization growth rate. At this stage organization take critical decision of changing pricing, modifying product to differentiate their product from competitors.
Sales of product already reach to saturation level increase in market share is pretty much difficult so company just focus to retain market share to continue the inflow of cash. Every organization wishes that their product stay for long time on this stage.
This stage is sort of bad news for organization, at this stage product sales decline result in minimum or no profit margin. Marketing manager have to take the decision whether to go with this product means to harvest or divest the product.
At each stage marketing management have to take decision about the marketing mix. Best marketing mix can gives fruitful results to organization in the form of revenues and profits.