Stage of Product Life Cycle

Stages of Product Life Cycle

1.    Research & Development Stage

During this stage product is developed, most of the cost in this stage is capital in nature.

2.    Introduction Stage

Next stage is launching of product in the market. At this stage a lot of advertising activity is required. At this stage product is being produced at low quantity, therefore unit cost will be high, while profitability will be on lower side.

3.    Growth Phase

At this stage the large production will be made to meet the customer demand. Large production will lower the unit cost and therefore profitability would be at higher side.

4.    Maturity Phase

At this stage organization will try to maintain its market share. The product will be still making good profits at this stage.

5.    Decline phase

In this stage demand for the product start to fall and therefore profit will be shrinking. The firm will start preparation for exist and existing inventory will be sold. Firm continue to produce the product till the point selling price is more than variable costs.

6.    Withdrawal Phase

In this stage organization stops producing the product and incur necessary cost for the withdrawal.