(1) Stage 1: Entry (Entry) Stage
Refers to the product from design, production to market, and then to the testing stage. After new products enter the market, they enter the introduction period. At this time, there are not many kinds of products, and customers don't know about them. Except for a few novel customers, almost no one really buys products. In order to expand sales, manufacturers have to spend a lot of money on promotion to promote their products. At present, due to the limitation of production technology, the product output is small, the manufacturing cost is high, the advertising cost is high, the product sales price is high, and the sales volume is very limited. Enterprises usually can't make profits, but they may lose money.
(2) the second stage: growth period
When the product enters the introduction period, after the sales are successful, it enters the growth period. The growth period means that the product has passed the trial sale, and the buyer gradually accepts the product, and the product stands on the market and develops sales. This is the stage of demand growth, and both demand and sales are growing rapidly. Production costs have fallen sharply and profits have increased rapidly. At the same time, while seeing profits, competitors will gradually enter the market to participate in the competition. As a result, the supply of similar products increased, the price decreased, and the growth rate of corporate profits gradually slowed down, eventually reaching the peak of life cycle profits.
(3) the third stage: maturity
Refers to a product entering mass production and entering the market stably. After the growth period, with the increase of the number of buyers, the market demand tends to be saturated. At this time, products are becoming more and more popular, standardized, low-cost and high-output. Sales growth was slow until it began to decline. Due to the intensification of competition, manufacturers of similar products have to increase investment in product quality, design, specifications and packaging services, which has increased costs to some extent.
(4) The fourth stage: recession.
This means that the product has entered the phase of elimination. With the development of science and technology and the change of consumption habits, the sales volume and profit of products are declining. The products in the market are aging and cannot meet the market demand. There are other new products with better performance and lower price, which are enough to meet the needs of consumers. At this time, high-cost enterprises will stop production one after another because they are unprofitable, and the product life cycle will end one after another, and eventually they will completely withdraw from the market.
Extended data:
Marketing strategy of product life cycle;
Different stages of product life cycle have different market opportunities and market risks. Only by being far-sighted and choosing marketing objectives and strategies consistent with the product life cycle can we ensure the survival and development of enterprises.
Familiar with the growth law of product sales, grasping the basic characteristics of product life, reasonably establishing sales and marketing objectives, and dynamically formulating marketing strategies are the basic ways to prolong product life and realize product value and its appreciation.