Product life cycle

The product life cycle portrays distinct stages in the sales history of a product.

To say that a product has a life cycle is to assert four things:

• Products have a limited life.

• Products sales pass through distinct stages, each posing different challenges to the seller.

• Profits rise and fall at different stages of the product life cycle.

• Products require different marketing, financial, manufacturing, purchasing, and personnel strategies in each stage of their life cycle.

We can identify four stages in the product life cycle:

• Introductory stage.

• Growth stage.

• Maturity stage.

• Decline stage.

Introductory stage

At the beginning of the product's life, the product needs to be "introduced" to its target market. Up to this point, it has incurred all the costs of research and development, and the costs of launching it onto the market. The firm will want to get the money it invested back as soon as possible so that it can start to show a profit.

Growth stage

The more rapid the growth, the sooner the profit.

Maturity stage

The company gets all the rewards of good research and development, good product launch strategies, and good pricing and promotion. At this level of sales, the fixed costs are being shared by the maximum number of units and the highest level of profit is being made.

Eventually, however, newer products, competitors' actions, new technology or just changing taste and fashion will cause all products to reach the end of their lives.

Decline stage

Decline is the stage where sales and profits start to drop. Black and white television is an example of a product in its decline stage.

Product quality

It has been found that the best way to improve productivity is to improve product quality. Actually doing the things right the first time improves product quality, lowers production costs and maintains competitive position in the market.

There have been identified eight dimensions of quality.

Performance. The quietness of a car's ride; the resistance of cosmetics to smudging; the clarity of the picture, sound and color for a TV set; low energy consumption of appliances: the sound from a stereo system.

Features. The colors, patterns and fabrics that are available in furniture, towels, sheets, drapes, etc.; the different cycles and options available on washers, dryers, microwaves, refrigerators, etc.

Reliability. Dependability of a product or service to perform properly over time. How often does the photocopy machine need repairs and what does it cost? Automobile reliability is one of the most desired attributes for anyone purchasing a car.

Conformance. How the product meets desired standards and tolerances such as size, consistency of color, etc. Does the product reach its customers on time? This is particularly important for businesses whose products are used in the assembly of other larger products. Automobile suppliers who provide parts for automobiles rolling off an assembly line must meet standards, quality and tolerances to sell their parts to the manufacturers.

Durability. How long a product will last under various conditions. Light bulbs and batteries are sold and advertised on their longevity. How many hours will the light burn? In some cases companies will provide a lifetime guarantee.

Serviceability. The ease of repair or maintenance of a product. Many firms now have toll free "hot lines" for consumers to use if they have questions or need repairs. These hot lines are designed to reduce dissatisfaction and maintain good customer relations. "Downtime" for a copier or computer must be minimized. Can the company guarantee service in six hours? Farmers cannot afford down-time during harvest season. Can the manufacturer guarantee delivery of any part in 24 hours?

Aesthetics. How a product looks, feels, sounds, tastes and smells. The design of the product is important. Consider Hummer and Mazda. Their aesthetic looks are different. But they totally conform to the style and designation of both autos.

Perceived Quality. The reputation of the product, its name and label. Japanese products now have a general aura of high quality. Yet how many of the products are fully made and assembled in Japan? Could some of the component parts come from South Korea, Taiwan or China? The Jараnese product could actually be made in America, such as Honda in Ohio and Mitsubishi televisions in California. Is the quality as high for an American-made Honda as a Japanese-made Honda? There has been reported a difference in perceived quality between Japanese-made Hondas and American-made Hondas.

Key words and word combinations of the text.

raw material	extract
quarrying	purify
wholesale	retail
refuse collection	consumer goods
industrial goods	capital goods
convenience goods	shopping goods
home alliances	impel
components	supplies
tangible	intangible
consultancy	benefits
winning technology	legal
operate	life cycle
maturity	decline
launch	fixed costs
features	performance
reliability	conformance
durability	serviceability