All products go through distinct phases or stages. Together these are known as the product life cycle.
The number of sales and the length of a product life cycle might be different for different products but all products share a general pattern of growth and decline. This cycle can be shown on a graph of sales over time.
Many businesses record and track sales information like this to help them know when to adjust costs and price, to boost sales and to extend the life of the product.
Product life cycle can be divided into the following five stages:
Research and development
product is not on the market yet
research and development and testing take place
prototypes are built and modified before a product is ready for launch
no sales are made
development costs will need to be recovered later
product is launched on the market
advertising costs will be high in order for the product to get noticed
sales begin to rise
advertising costs are still high
a profit may be made, if all research and development and advertising costs have been recouped.
Maturity and saturation
sales are at their peak
advertising can be reduced as product is now well known