+ The product life cycle is an important concept in marketing. + The product life cycle is the period of time over which every product is introduce, developed, brought to market and eventually removed from the market. Product Life Cycle* The theory of a product life cycle was first introduced in the 1950s to explain the expected life cycle of a typical product from design to obsolescence, a period divided into the phases of product introduction, product growth, maturity, and decline. The goal of managing a product's life cycle is to maximize its value and profitability at each stage. Life cycle is primarily associated with marketing theory.Introduction Stage + In this stage of the cycle could be the most expensive for a company launching a new product. When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some firms may announce their product before it is introduced, but such announcements also alert competitors and remove the element of surprise. Advertising costs typically are high during this stage in order to rapidly increase customer . The goal of any new product introduction is to meet consumers’ needs with a quality product. Ww \Introduction Stage Q Researching, developing and then launching the product. Q Costs are very high C Slow sales volumes to start Q Little or no competition Oi Demand has to be created C Customers have to be prompted to try the product Oi Makes little money at this stageProduct branding and quality level is established Intellectual property protection such as patents and trademarks are obtained. Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators.In the growth stage of the product life cycle, the market accepted the product and sales begin to increase. The company may want to make improvements to the product to stay competitive. At this point, there are still relatively few competitors, sales are increasing at their fastest rate In the growth stage, the goal is to gain consumer preference and increase sales. The growth stage is a period of rapid revenue growth.O Costs reduced due to economies of scale. Q Sales volume increases significantly. Q Profitability begins to rise. Q Public awareness increases. C Competition begins to increase with a few new players in establishing market. Ci Increased competition leads to price decreases. C Increase market share.© = Introduction Stage Growth Stage Maturity Stage Decline StageWhat can businesses do to extend the product life Advertising — Try to gain a new audience or remind the current audience Price reduction — More attractive to customers ‘Adding value — Add new features to the current product. Explore new markets — Selling the product into new geographical areas or creating a version targeted at different segments New packaging — Brightening up old packaging .