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Product life cycle - Coggle Diagram
Product life cycle
Definitions
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Like humans - products go through a life cycle. From research and development at the start to launch (birth) and through to decline (death).
New Product Development
This is the first stage of the product life cycle where a product is designed and market research is analysed 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.
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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Maturity phase
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Products have to be discounted to keep sales high – so prices may be lowered or the product may be put on sale.
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.
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