Five stages of Product Life Cycle

Five stages of Product Life Cycle are discussed below:

1. Introduction Stage :-
   At this stage the product is launched into the market, hence awareness and acceptances are minimal. So here the emphasis should be on promotional activities so as to acquaint customers with the product and gain acceptance.
   In the initial stage with distinctive speciality a firm can charge a high price but as this characteristic fades away and the product becomes a pedestrian one, he has to either soften the pricing or bring a change in the product to create some fresh interest so as to compete well with the new products that have entered the market.
   Advertising and sales promotions are extensively used in order to build awareness, encourage evaluation and trial and initial adoption.
2. Growth Stage :-
   During this stage mass market acceptance will take place through early adopters. Growth will be rapid, profits will emerge and all initial costs covered during this period. This stage is marketed by increase in the number of competitors, major product improvements, etc.
   Intensifying competition might lead to price reductions. An expansion of the distribution network will be sought in order to facilitate market penetration in view of increasing pressure from competitors.
3. Maturity Stage :-
   When the product reaches maturity, sales growth continues but at a diminishing rate due to declining number of potential customers. This stage represents the most competitive stage in the life of a product but one in which profits are flowing in steadily. Special promotional efforts are needed to attract new users to the product. During this stage emphasis is given in opening new distribution channels and retail outlets.
4. Saturation Stage :-
   There are now many competitors in the market, profits per unit have further declined and there is no growth in sales. It is time to consider new markets, changes in prices, promotion and introduction of new product versions or new products.
5. Decline Stage :-
   The product reaches a stage of declining sales as it faces competition from better products or better substitutes developed by the competitors. At this stage the product has to be redesigned or the cost of production reduces so that they can continue to make some contribution to the company.
   The manufacturer may have to accept the gradual decline and ultimate withdrawal of the product from the market or may try to revitalize it by introducing new product applications, new packaging, a different advertising theme, new selling methods, new distribution channels or new markets.