how does a product lifecycle matter in a business?
Initially, we must understand all the business are running on a product lifecycle. Along with the time product’s life get altered, occasionally they are in demand or irregularly we need to terminate them due to no demand. Accordingly, we need to aware of such fluctuations in the market if an entrepreneur wants to grow his or her business. As an entrepreneur it’s your responsibility how actually a market works, awareness about product lifecycle helps an entrepreneur for long-run business. The entrepreneur must study his or her creation or services as per market demand. In a business, a product lifecycle passes through four stages. Following are the four stages of a product lifecycle:
product lifecycle is plotted on the x-axis while the self is plotted on the y-axis. The times, as well as the sales figure, will depend on the invention to invention.
1. Introduction Stage
- In the introduction stage, initial sales growth is slow.
- Marketing and promotional expenses are high, leading to negative or no profit.
- To create product awareness and induce trail for the invention.
2. Growth Stage
- In the growth stage, sales start picking up, leading to rising profits.
- The company tries to maximize arcade share, resulting in an increase in profits.
3. Maturity Stage
- In the maturity stage, sales reach its peak and then it starts declining.
- Profit also starts declining.
- The company struggles to keep its arcade share intact.
- Whenever the maturity stage comes in the company, the company needs to launch its new invention in order to survive in the arcade.
4. Declining Stage
- Sales, as well as profit, go down.
- Sometimes declining stage does not come in the company because of evergreen demand.
- Evergreen demand keeps the company away from declining stage.
Generally, all inventions pass through these four stages but in some cases, the PLC(Product Lifecycle) curve may be different.
With the new usage of the product also the sales and profit cycle shows a different scalloped pattern like plastics, Nylon, and fiber. Sometimes a product grows rapidly reaches its peak then fell to a petrified level the petrified level is sustained by the replacement arcade of early adopters and a new market for late adopters.
Another Product Life Cycle (PLC) pattern is:
In the case of new drugs, where the drug reaches its peak and then declines, again the company pushes the product and it produces a second cycle.