Product Life Cycle

Sales and Profits Over the Product’s Life From Inception to

Demise

Sales and
Profits ($) Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment
Losses/
Investments ($)
 DEVELOPMENT
•THE COMPANY GENERATES A NEW PRODUCT IDEA.
•INVESTMENT IN RESEARCH AND DEVELOPMENT.
•TEST MARKETING MAY BE CONSIDERED.
•ADVERTISING IS DONE TO AROUSE INTEREST IN PROSPECTS.

INTRODUCTION
•THE COMPANY LAUNCHES THE PRODUCT IN THE MARKET.
•LOW OR MODERATE SALES
•LOW OR NO PROFIT.
•LOW DEMAND.
•HIGH PROMOTIONAL EXPENSES.
•SALES RISE
GROWTH
•PROFITS ARE AT PEAK.
•DEMAND INCREASES.
•SIZE OF THE MARKET GROWS.
•COMPETITORS ENTER THE MARKET.
•AGGRESSIVE PROMOTION AND MARKETING.

MATURITY
•SALES CURVE IS AT PEAK.
•SALES ARE STAGNANT.
•PROFITS DECLINE.
•REMINDER ADVERTISING.
•INTENSE COMPETITION.
•INCREASE MARKETING COSTS.
•HIGH PROMOTIONAL EXPENSES.
•DECLINING MARKET SHARE.