PRODUCT LIFECYCLETHE COURSE OF A PRODUCT’S SALES AND PROFITS OVER...

5. Product lifecycleThe course of a product’s sales and profits over its lifetime. It involves five distinct stages:product development, introduction, growth, maturity and decline.● Product development begins when the company finds and develops a new-productidea. During product development, sales are zero and the company’s investment costsmount.● Introduction is a period of slow sales growth as the product is being introduced in themarket. Profits are non-existent in this stage because of the heavy expenses of productintroduction.● Growth is a period of rapid market acceptance and increasing profits.● Maturity is a period of slowdown in sales growth because the product has achievedacceptance by most potential buyers. Profits level off or decline because of increasedmarketing outlays to defend the product against competition.● Decline is the period when sales fall off and profits drop.Topic 7: Pricing