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Product Life Cycle - Coggle Diagram
Product Life Cycle
decline phase
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The business may decide to heavily discount to get any last sales before the product becomes obsolete
There is a trend towards more disposable items rather than products that can be fixed or repair – they are simply replaced with new ones, therefore repairable goods are in decline phase
new product development
This is the first stage of the product life cycle where a product is designed and market research is analyzed to produce a product which will satisfy customer needs
Cash flow at this point is tight, this is a very expensive phase and at this point the product is not making any revenue and therefore no profit
All capital at this point will just be an investment, there is always a risk of the product not being a success
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maturity phase
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Market is starting to be saturated – everyone has bought the product who is likely to buy/ sales are high but profits are starting to fall
Products have to be discounted to keep sales high – so prices may be lowered or the product may be put on sale
introduction phase
The introduction phase will involve high costs in research and development and the product may have been test marketed before launching, so profits may be negative
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extension strategies
There are lots of ways that a business can extend the life cycle of a product rather than withdrawing it from the market. This may be to use to a store of raw materials or to keep loyal customers happy.
updating packaging/adding more or different features/changing target market/advertising/price/reduction/change the product/rebranding
What is product life cycle: Like humans - products go through a life cycle/From research and development at the start to launch (birth) and through to decline (death)/Some products take longer than others to go through the life cycle