In this lesson, we will examine these four stages.Each stage of the life cycle has its own characteristics.

You are watching: Occurs when a company retains a product but reduces its marketing support costs.

This table summarizes the marketing objective, 4Ps, and competition in each one of the four stages of the life cycle.


Marketing ObjectiveGain AwarenessStress DifferentiationMaintain Brand LoyaltyHarvesting, DeletionCompetitionProductPricePlace (distribution)Promotion
FewMoreManyReduced
OneMore versionsFull product lineBest sellers
Skimming or penetrationGain market share, dealDefend market share, profitStay profitable
LimitedMore outletsMaximum outletsFewer outlets
Inform, educateStress points of differenceReminder-orientedMinimal promotion

Introduction Stage

This is the stage in which the life cycle starts. The product is a brand new offering in this stage.

Characteristics of the introduction stage include:

Profit is minimal, and negative in many cases.Sales grow slowly as the promotional efforts raise awareness for the new product.The marketing objective in the introduction stage is to create consumer awareness and stimulate trial.The goal is to initiate the initial purchase of the product by consumers.

Companies often spend heavily on advertising in the introduction stage. Building awareness and stimulating product trial requires large spending in marketing activities. Advertising and promotion expenditures are often made to stimulate primary demand. Primary demand refers to demand for the product class rather than demand for a specific brand. Once the life cycle progresses, competitors come in and introduce their own brands. In those stages companies focus on creating selective demand, which is the demand for a specific brand.

Pricing in the introduction stage could be either high or low. A high initial price is known as skimming pricing strategy. It helps the company recover the high costs of development and commercialization. Another benefit of skimming pricing is that it allows the company to take advantage of the price insensitivity of early buyers.

There are disadvantages of skimming pricing strategy, one of which is that high prices tend to attract competitors. Other firms see high prices as a signal of high profits. In order to discourage competitors, businesses can start their initial offering with a low price. This type of pricing is known as penetration pricing strategy. This pricing strategy usually increases the sale volume, which is ideal to build up market share. We will cover these pricing strategies and many more in the coming lessons.


Stop and Think Question:Why do you think profit would be negative in the introduction stage?


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Businesses spend large sums of money in research and development as well as commercialization of new products. Due to high initial costs, profit initially would be negative.


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Growth Stage

This is the second stage in the life cycle. It follows the introduction stage. Characteristics of the growth stage include:

We usually observe rapid increases in sales. Sales increase at an increasing rate.Competitors start to appear in the market.Profit usually peaks during the growth stage.

Businesses focus on stimulating selective demand in their advertising. The goal is to compare their product’s benefits to those of competitors" offerings in order to gain market share.Businesses add new features to the original design of the product in this stage. The idea is to differentiate the company"s brand from those of its competitors.

The marketing objective in the growth stage is to stress points of difference. The goal is to build market share by highlighting the superior characteristics of the product versus competitive products (stress differentiation).


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Example:E-book reading from Kindle or other tablets can be given as an example of a product in the growth stage.


Maturity Stage

The maturity stage follows the growth stage in the life cycle. Characteristics of the maturity stage inlcude:

Sales increase at a decreasing rate at the maturity stage and profit starts to decline. The reason is because of fierce price competition among many sellers in the market.Marketing attention in the maturity stage is often directed toward holding market share through further product differentiation and finding new buyers.The marketing objective in the maturity stage is to maintain brand loyalty with reminder orientation. The company built its market share in the growth stage, now it is the time to maintain and hold the market share.
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Example:Soft drinks and presweetened cereals are some products in their maturity stage.


Decline Stage

The decline stage is the last stage of the life cycle. Characteristics of the decline stage include:

Sales and profits decline.The product is completing the life cycle.Environmental factors play a key role in entering the decline stage. It is not because of any wrong strategy on the part of the company.

In many cases, technological innovation is the reason behind the decline stage as newer technologies replace older technologies. For example, typewriters are replaced by computers. Cloud technology is replacing USB drives and other storage devices.


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Example:Examples of products in the decline stage would be analogue TVs and desktop computers.


There are two strategies a company might follow in the decline stage.

1. Deletion: The company simply removes the product from the market. It is the most drastic strategy for a declining product. The company still would need to address the existent users of the product with any support or maintenance if needed. It might take time to eliminate the product completely.


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Example:Sanford still continues to sell its Liquid Paper correction fluid. It is mostly used in typewriters and has not much of a need in the era of word-processing equipment.


2. Harvesting: The company retains the product but reduces marketing support costs. The product continues to be offered in the market, however salespeople do not allocate time in selling the product. The company does not apply any promotional campaigns to the product, and no money is spent in advertising the product.


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Example:Coca-Cola still sells Tab. It is the first diet cola, and is retained for a small group of die-hard fans. According to Coke’s CEO, “It shows you care. We want to make sure those who want Tab get Tab.”


Length and Shape of the Product Life Cycle

Above we have seen the four stages of the life cycle. Now, we turn our attention to the length and shape of the product life cycle.

Length of the Product Life Cycle

There is no exact time that a product takes to move through its life cycle. It is not possible to know ahead of time when a product will move from introduction to growth to maturity and finally to the decline stage. Usually consumer products have shorter life cycles than do business products. As a result of 24/7 connectivity, consumers are informed about new technologies and products faster, which shortens the life cycles of existent products. Technology is the force behind innovation and leads to the development of new products which replace the existing ones.

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Shape of the Product Life Cycle

There are four product types that follow particular life cycle shapes.