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The life cycle of a product is the time period from when a new item is introduced to the public until it is no longer in demand. The product life cycle is divided into four stages to include: the introduction of the product, its growth in demand, the maturity of the product and its decline. The four stages not only represent the awareness of the product in the eyes of the consumer, but the profit resulted from its sales, as well as how to shape marketing and pricing.
The introduction phase is the launch of the product to consumers. Profit and sales are not a large concern at this stage of the product life cycle and the focus lies more on product awareness. Price for the product may be low to persuade buyers to "test" it's quality and usefulness or high to offset the cost of marketing the new item, depending on the product. One of the main goals in the introduction phase is to create a branding image for the product.
A continued effort to market the product brand during the growth stage of the product life cycle and a vast amount of funding is often spent on advertising to a more broad audience. The price is often maintained to keep with demand or reduced to attract additional buyers. The growth phase commonly brings in large revenues as the product gains popularity and distribution is expanded to satisfy consumer demand.
The maturity phase can be coined by taking a look at competitors and their efforts to create their branding image through a very similar product. The market becomes saturated although revenues can continue, but may plateau. The product features may be strengthened in an attempt to differentiate the product from others. One of the primary goals during the maturity stage is to lengthen the life of the product before consumers are no longer interested.
Decline, as the final stage in the product life cycle, offers firms to choose one of three options regarding the product. They may opt to withdraw the product from shelves -- by drastically reducing the price and clearing out the warehouse supply -- ride the coattails of the previous marketing efforts to sell the product or maintain the current product with the hope that other competitors with withdraw their product from the market. Decline may be because of the change in preferences of consumers or resulting from a change in fashion trends.