First 315 words of the document:
Product life cycle
The product life cycle consists of 4 main stages:
At this stage the business spends a lot of time and money researching the
product and the market for the product. There are no sales at this time. An
advertising campaign will start. The product is then launch and placed on the
market. There will be low sales and the price will be expensive.
At this stage the product becomes know in the market and there will be a
wider distribution network. Advertising will continue but it will be less frequent
than at the product launch. Customer awareness increases. The price will still
be high and sales and profits will start to rise.
At this stage the market may become saturated as copycat products are
launched onto the market. Sales growth flattens out and cash flow improves.
Advertising is persuasive and is used to remind the market the product still
exists. The business may try to increase promotion in an attempt to maintain
market share. Profits are still good. The product is in a highly competitive
market and weak brands often disappear at this stage as they cannot
At this stage the product sales and profits are beginning to fall. The product is
no longer offering what the customers want or new technology makes other
products better to consumers. Some companies will stop their marketing to
cut down on the costs but will still make a profit between now and when the
product is withdrawn from the market. Eventually the product is taken out of
production. The last products are often sold at a reduced price, meaning a
further reduction in profits. The product is finally removed from the market.