Moreover, product life cycle ends with the removal of that product from the specific market place. Product life cycle can be characterized by several stages, such as research, development, introduction, growth, maturity, decline and obsolescence (Moore, Palich and Petty, 2006, p.312). Each and every stage is generally linked with the changes in the streams of parts, raw materials and distribution of the products. Generally product life cycle includes four traditional stages, such as introduction, growth, maturity and decline. These four stages of product life cycle are described below.
Low sales growth rate of the products is the major characteristic of the introduction stage. In introduction stage the organizations launch or introduce new products in the market. Monopoly can be developed by the organizations depending upon the need and efficiency of the products to the customers (Saaksvuori and Immonen, 2011, p.103). During this stage the organizations generally accrue losses rather than business profit. It is true that if the organizations introduce products of new product class, the target customers may not be aware of true effectiveness and potential of these products. It is important for the organization to transfer information about the product among the target customers through several Medias in order to achieve potential competitive edge within the market place (Kumar and Korb, 2005, p.21). Introduction stage has two major characteristics namely low market competition and incurring loss rather than profit.
Major characteristics of the growth stage are customers become responsive towards new products and growth of sales. This growth comes through the innovation’s acceptance by the target customers. Organizations generally enjoy significant business profit through their new products in this growth stage (Stark, 2011, p.32). If the organization can maintain the monopoly, they can experiment with innovation and several new effective ideas to maintain the sales growth. Growth stage is the appropriate time to introduce other new effective products in the competitive market place (Soenen and Olling, 2003, p.54). It creates an effective product image among the target customers and its competitors. During maturity stage, the sales and growth rate of the products gradually slowdown as the products have already achieved huge acceptance in the competitive market place (Wang and Gupta, 2011, p.239). New organizations start to experiment by innovative product models and strategies in order to compete in the saturated market place. Competition for the target customers get fierce due to existence of many organizations, despite the increase of sales and growth rate at the initial phase of this maturity stage (Roebuck, 2011, p.76). At the beginning of this maturity stage, the business profit decreases due to aggressive competition within the market place. In addition, maturity stage of the product development is very much essential for the organizations to avoid decline stage of the products. Several products die and get wiped out from the market place in this decline stage due to the low sales’ growth rate of the products. Several organizations share the same competition. It makes difficult for all the entrants to control and maintain the sustainability of the sales levels (Frenken, 2006, p.133). Product category and efficiency of the organization become important factors in this decline stage as the target customers and market may perceive the specific product as the old product may lack potentiality and effectiveness. Lower demand of the products is the major characteristic of the decline