Product: The Product Life Cycle Flashcards

All 8 cards in this deck

Why does a product usually make a loss in the introduction stage?

The costs of developing and launching it are high while few units have yet been sold, so revenue does not cover costs.

Name the four phases of the product life cycle in order.

Introduction, growth, maturity, decline.

What does the product life cycle show?

How a product's sales change over time as it moves through the stages of its life, from launch to withdrawal.

What happens in the introduction phase of the product life cycle?

The product is first put on sale. Sales are low, so the business uses promotion to make customers aware of it and get them to try it.

What happens in the growth phase of the product life cycle?

Sales rise quickly as more customers buy the product, and it may start to make a profit.

What happens in the maturity phase of the product life cycle?

Sales growth slows and sales level off at their peak. Most potential customers already have the product and rivals compete hard, so the business relies on repeat purchases and customer loyalty.

What happens in the decline phase of the product life cycle?

Sales fall, often because the product has become out of date or rivals offer something better, until the business withdraws it.

Why should a business develop a new product before an existing one reaches decline?

So the new product is ready to replace the falling sales of the old one.