Unit 3: Building a Business - Product Life Cycle

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Stages of the product life cycle:

  • Introduction: The product is launched/released onto the market.
  • Growth: If the launch is successful sales will increase quickly and the product may make a profit for the first time
  • Maturity: Sales growth slows down, but repeat purchases still happen and customers start becoming loyal. The market becomes saturated as competitors introduce competing products
  • Decline: Eventually the product is outdated and there is a big fall in sales, leading to the withdrawal of the product

Extension Strategies 

Businesses can increase the life of a product using extension strategies. This involves changing the product slightly so that it has a new appeal to the target market or appeals to a new market segment. For example: Apple does this by bringing out new models of the iPhone and iPod.

Product Portfolio Analysis 

Businesses sell a range of products. This is called the Product Mix or Product Portfolio. New products are regularly  launched onto the market. Product Portfolio analysis allows a business to make…

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