Question

In a product-form life cycle, the sales
volume grows at about the same rate as
GNP in which
stage​

Answer 1

It is important to understand the Product Life Cycle (PLC) as it provides insights on the competitive dynamics of the product being marketed. The PLC also exhibits the distinct stages in the sales history of a product.

The PLC comprises four stages known as introduction, growth, maturity and decline. In the stage of introduction of the product in the segmented market the profit remains almost non-existent and product sales also remain slow.

However, the expenditure in pushing the product into the market is found heavy for the marketing firm. The product passes into the next stage of PLC – growth, with improved sales and profit conditions observing the rapid acceptance of the product in the market.

The product remains in the growth stage till the competition increases and pulls back the sales of the existing product. At this juncture the product moves into the stage of maturity where it faces setback on the volume of sales but succeeds in sustaining the profit level. While passing, into the stage of decline the product faces downward trend in both the volume of sales and profit.

Hypothetically all the products in the market move through these stages of life cycle but there could always be some exceptions.

Some of the products get out of the market in the stage of introduction itself while few are thrown out of competition at the growth stage. During the stage of maturity the strategy for product diversification begins and some products fall out of the main stream of the product categories in the market.

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