Product life cycle

Product life cycle illustrates the different market stages of the product.

The stages are as follows

• development
• market launch
• growth
• maturity
• decline

In the development stage there are no sales, so the costs are high. During market launch the turnover increases slowly, there is no profit, the number of competitors is limited. In the growth stage the turnover increases rapidly and the company starts to make profit. The number of competitors raises, customers represent the early majority. In the maturity stage the product becomes to be mass product. The turnover and the profit reaches maximal level, the number of the competitors is stabilized and starts to decrease. The market gets saturated. In the decline stage the product becomes outmoded, both the turnover and the profit declines and becomes negative after a while.

The pattern of the product life cycle depends on the duration of the different stages.