The product life cycle is a concept developed by German economist Theodore Levitt in 1965, which states that all products have a limited lifespan and go through five stages: development, introduction, growth, maturity and decline. Companies invest heavily in developing new products to ensure their businesses continue to grow. The product development stage is the research phase that precedes the launch of a product. Once a product has been developed, the stage of introducing the PLC begins.
At this stage, the product is introduced to the market for the first time and marketing and promotion peak. The company usually invests a significant amount of effort and capital in promoting the product and putting it in the hands of consumers. The growth phase follows, where the product has been accepted by customers and the company is trying to increase its market share. Demand and revenues are rising, ideally at a constant rate.
The time needed to achieve consistent growth depends entirely on the product, the current market landscape and the rate of customer adoption. The maturity stage is when saturation has occurred and sales volume has peaked. The least successful competitors are often kicked out of the competition during this stage. This is known as a shaking point.
The maturity stage can last a long or short time, depending on the product.Finally, there is the decline stage where sales volume decreases and profits start to drop. This is when products are gradually removed from the market. The current state of the economy can have a direct impact on the length of the life cycle of a product.It is essential to use common sense and a general understanding of the market together with the life cycle to ensure that you're prepared to adapt as needed. Products, like people, have life cycles.