What does the Product Life Cycle describe?

The Product Life Cycle is a model that outlines the different stages a product goes through from its introduction to the market until its eventual decline. It typically consists of four key stages: introduction, growth, maturity, and decline. The primary focus of this concept is to illustrate how sales and profitability evolve over time as the product moves through these stages.

Initially, when a product is launched, sales may be slow, but as it gains market acceptance, sales will begin to increase, reaching a peak during the growth and maturity phases. Profitability generally improves during these stages as the product becomes established and market competition is managed effectively. Eventually, sales will decline due to market saturation, changing consumer preferences, or the introduction of new technologies or alternatives.

This understanding helps businesses make strategic decisions regarding marketing, production, and resource allocation throughout the life of the product, aligning their strategies to maximize sales and profitability as the product matures.