Question

Every product has a life cycle. A fad product such as a fidget spinner, can have a very short cycle,

whereas a popular automobile, such as the Honda Civic, can have a very long life cycle. Explain the

characteristics of the growth and decline stages of the life cycle and related marketing objectives

and strategies.

Answer 1

A product's life cycle is generally divided into four stages:

1. Introduction: requires a very large marketing effort (a lot of money invested), sales are generally low but the goal is to establish the product in the customers' minds.
2. Growth: Sales start to pick up as customers accept the new product or service, and new competitors might appear. Companies have to try to differentiate their product from the competition.
3. Maturity: sales reach their highest peak. Many companies extend the growth stage by making small changes and different versions of the product or service. Competition is generally very intense at this stage and since the market growth stalls, each company tries to win the market share of other companies.
4. Decline: sales start to decline since the product or service might become obsolete. Competition starts to shrink since companies start to exit the market. Companies might extend the decline stage by adding new uses for their products or cutting prices.