Product Life Cycle | Introduction Growth Maturity & Decline Stage

Fri, 04/24/2009 - 19:21 -- Umar Farooq

Following are the 4 Stages of Product Life Cycle:

  1. Introduction Stage
  2. Growth Stage
  3. Maturity Stage
  4. Decline Stage


Here the product is launched at the first time. At this stage the sales growth is very slow, the causes of slow growth sale are:

Delay in expansion of Production Capacity

  1. Technical Problems
  2. Delays in obtaining sufficient distribution

At this level products are low and negative because of

  1. Low sales
  2. Heavy distribution expenses
  3. Promotion and advertisement expenses

If management considered price and promotion the only variables, can pursue four strategies.

  1. Rapid Skimming. Launching new product at high price and high promotion level.
  2. Slow Skimming. Launching new product at high price and low promotion.
  3. Rapid Penetration. Launching new products at low price at low price and spending heavily on promotion.
  4. Low Penetration. Launching new product at low price and low penetration.


In this stage of PLC sale is climbed rapidly.  The early adopters who like the product start buy it. Looking to opportunities new competitors enters to the market. They introduce new features and expand distribution.  Prices remain where they are fall slightly. During the growth stage prices increase as production costs are spread over a large volume and per unit manufacturing cost falls.

Strategies to Maintain Rapid Market Growth

  1. Improved production quality and product feature
  2. Enter new market segments
  3. Increase distribution coverage and new channels
  4. Lower prices to attract sensitive buyers
  5. Add new models and flanker products.

Spending money on product improvement, promotion and distribution can capture dominant position.


At some point the rate of sale growth will slow, and product will enter in maturity stage.  This stage lasts longer than the previous stage, and posse strong challenges to marketing management. The maturity stage of product life cycle divides in three stages

  1. Growth Maturity. The sales growth rate to decline and there are no new distribution channels.
  2. Stable Maturity. In this stage sales flatten one per capital basis because of market saturation.
  3. Decaying Maturity. In this level the absolute level of sales start to decline and customer switching to other product and substitution.

In this stage abandon weaker production and concentrate on more profitable and new products. Market management adopt:

  1. Market Modification
  2. Product Modification
  3. Product Mix Modification

Market Modification

In market modification company tires to expand its market for mature brand.  There are three ways to expand the number of brand users:

  1. Convert nonuser
  2. Enter new market segments
  3. Win competitor’s customer

Product Modification

Here company changes the characteristics of product through:

  1. Quality improvement. In quality improvement market increase its distribution, taste and reliability.
  2. Feature improvement. Adding new features (weight, size, materials) that expand the product safety, convenience.
  3. Style improvement. It increases aesthetic appeal and unique market value of the new product.

Product Mix Modification

Company also try to improve sale by modifying other marking mix. Like

  1. Price
  2. Distribution
  3. Advertising
  4. Sales promotion
  5. Services
  6. Personal selling


Here in decline stage of product life cycle the sale of most products forms and brands eventually declines.  This decline may be slow or rapid. Reasons for decline sale are:

  1. Technological advances
  2. Shift in consumer taste
  3. Increased domestic and foreign competition

When the firms profit declines some firms withdraw from the market, but those who are remaining in the market may reduce their offered product.

Five Decline Strategies of product life cycle

  1. Increasing the firm’s investment to dominate the market.
  2. Maintaining the firm’s investment level.
  3. Decreasing the firms level selectively, by dropping unprofitable customers groups.
  4. Harvesting the firm’s investment to recover cash quickly.
  5. Divesting the business quickly by disposing of its assets as advantages.