Product Life CycleThe 5 Stages

Stage 1: Introduction• Companies producing these

products target towards innovators.

• Their pricing strategy is skim (pricing high to gain the first customers, then lowering it to gain more) .

• In the early stages such as this, your profitability is questionable because you’re unsure of how the public will respond to the new product. If it does well, the price may increase or lower depending on your consumer market.

Stage 2: Growth• Companies producing these

products target towards early adopters.

• Their pricing strategy is to penetrate (initially starting off low, possibly increasing, always changing depending on the market and demand).

• In the early stages such as this, your profitability is questionable because you’re just beginning to see how the public responds to the new product. As the product grows in popularity your marketing lowers (as the product begins to sell itself), and your profit is sure to grow.

Stage 3: Maturity• Companies producing these

products target towards the majority.

• Their pricing strategy is to penetrate because the price may vary as changes are made to the product and consumer demand increases.

• This is the stage/ status all products hope to achieve because the product is already successful and making money, however it can still be improved (has potential to be the best). During this stage you’ve established consumers, but have work to do in order to keep them satisfied.

Stage 4: Decline• Companies producing these products

target towards the late majority.

• Their pricing strategy is lower because they are competing with newer products popping up, and need to have a cheaper price in order to sell more.

• This is the most successful stage in the cycle because at this point your product is the best it can be. Your profit is considered cash cow, because you no longer need to make adjustments- the public loves exactly what they’re paying for and the money is raking in. However, this may not last for long, before the next new product enters the market.

Stage 5: Decision Point• Companies producing these

products target towards the laggards.

• Their pricing strategy is liquidation because they are on their way out.

• This is the final stage before the product is completely extinct. By this point, your product has been cast aside to make room for all the new merchandise and the your only consumers are those who have noticed the 75% off sticker on the product. No amount of advertising will help at this point and it is now time to decide whether or not to remove your product from the market.

Thanks For ReadingCarson Welychka