A 5-stage lifecycle. Assumes that Research and Development stage has been finished to create a product.
Introduction
- Product just releases.
- Most money will be spent on promotion and advertising.
- There is very little profit at this phase. mostly it is loss.
- Some products like those created by Apple have incredible short introduction phases.
Growth
- Early adopters and innovators purchase your product.
- They are sharing positive reviews of the product.
- You now begin to make some profit.
- Consumers reap the benefits of Economies of Scale
Maturity
- Sales hit their peak.
- The market is now saturated, and there are many competitors
- Most consumers already have your product or a replacement to your product
- The profits will begin to decrease soon
Decline
Sales start declining, and profits are declining.
Withdrawl
A debatable 5th stage, in which the product is taken off the market. The hypothetical good business will never reach this stage. Could be prevented by:
- Market Penetration
- Market Development
- Product Development But, even profit-generating products can be withdrawn like the IMac
Extension
When the product is rebranded or relaunched to be slightly different. It is an effort to update a matured product to prevent decline.