The product life cycle

The product life cycle shows the stages a product passes through, from the first idea and development all the way to being taken off the market. It maps a product's sales against time, so you can see how popular it is at each stage of its life.

It tracks the life of the product on the market, not how long a customer can use it. A tin opener might last twenty years in a kitchen, but sales of that model still rise and fall: once most households own one the market is full, and only newer designs from rivals tempt buyers.

The four phases

• Introduction — the product is designed, developed and launched.
• Growth — sales rise as more customers buy.
• Maturity — sales reach their highest level.
• Decline — sales fall and the product may be withdrawn.

Introduction

The introduction phase covers the designing and developing of the product before a single sale is made, and then the launch onto the market. Sales are usually low at first: the product is new, customers may not know it exists, and few shops may stock it yet.

Sales can still climb quickly after launch if the product is a hit and attracts attention. For example, a small firm called WrapIt launches reusable beeswax sandwich wraps and sells about 150 a month at local markets, because few shoppers have heard of them. A short clip of the wraps being washed and used again is shared widely, and sales jump to 1,200 the next month — still early in the product's life, but rising fast.

Growth

In the growth phase sales rise because demand grows and more shoppers buy, often after hearing about it from others or seeing it in more shops. Growth also attracts competitors, who spot the demand and launch similar products, sometimes at lower prices. To keep sales rising, the business may need to keep improving the product or promoting it more heavily — WrapIt, for instance, adds a larger lunch-bag size once rivals copy its wraps.