Question

Explain the concept of a "Product Life Cycle" and its significance.

Answer in 150-200 words

Answer 1

The Product life cycle refers to various stages a product needs to qualify in order to be successful in the market.

The concept of product life cycle can be defined as:-

• Development

It is termed as the first stage of the product life cycle where the concerned department of the organization begins the development of a particular product after analysing the market and the available resources within the organization.

• Growth

This is termed as the second stage when the product is accepted by the end-user and is growing at a faster pace which enables the company to generate profit out of it.

• Maturity

It is the stage when the company’s product sale is higher but there is a threat to the growth rate of the product due to external uncontrollable factors such as competitors.

• Decline

This is the fourth stage of the product cycle where the actual sales of the product starts to fall due to implementation of the bad strategies or due to the change in trend or prefences in the market.

The significance of the product life cycle is that it is mainly used as the forecasting method by the organization which enables them to get the first mover advantage and also gives the competitve edge in the market.