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THE SALES VOLUME OF YOUR PRODUCT CHANGES OVER TIME AS IT PROGRESS THROUGH VARIOUS STAGES IN THE PRODUCT LIFE CYCLE (PLC).
In the product introduction stage, prices are either very high or low, while competition and sales volume are low. As your product gains market acceptance and connects with different user segments, production efficiencies are gained due to the higher sales volumes. At this growth stage, competition is not a major issue and more money is spent to promote the product to a broader audience. Consequently, margins come down. Sales volume continues to grow until they reach a point of market saturation or maturity. At this mature stage, the growth has flattened out and competition has likely appeared. Prices are lower and margins are lower as greater efforts are made to gain distribution or share. As time goes on, the market saturation may continue, your consumer tastes may change or better options for your consumer may arise, leading the product into the decline stage.
The reality is that most products do not follow this predictable cycle.
Since all consumers are not alike, there will be different sales opportunities at different stages of the PLC. Extending the PLC will provide you with a greater opportunity for exposing your product to each consumer group.
There are numerous product life cycle strategies that may be appropriate for a particular stage of the product life cycle:
- increasing frequency of use
- different pricing
- product diversification
- new product uses
- entering new markets and segments
We will analyze your business and recommend appropriate product life cycle strategies for your particular situation. The right strategy can extend the life of a product, put it on a new stage of growth or even suggest when it’s time to harvest or divest.