University of Georgia| nursing 101 | University of Georgia
Product life cycles are divided into four phases: introduction, growth, maturation, and decline. In order to increase brand recognition, companies will launch a new product on the market. In this stage, businesses tend to spend a lot of money on marketing and promotional activities. They may also offer incentives like discounts or loyalty programmes to boost sales. The next stage is growth, when the demand for the product grows due to an increased acceptance by consumers or changes in market conditions. During this stage, companies tend to focus more on optimising their production process while still continuing promotional activities. The maturity phase is when the demand stabilises and the profits begin to decline due to the increased competition. Companies often turn to diversification methods such as expanding their markets or introducing new product lines in an effort to keep profitability.
The final stage is decline, whereby excessive competition causes the prices of a product/service and their profits to fall dramatically. This leads to its discontinuation. At each stage, it is crucial that companies accurately determine where they are in the lifecycle of a product so they can adapt their marketing strategy accordingly.