A Marketing Concept Learned through the Course - Essay Example

The first stage of the product life cycle is the introduction stage. The introduction state is a period characterized by slow sales as the product is introduced into the marketplace.

During this stage, profits are nonexistent because of the heavy expenses incurred with product introduction (Kotler). The second stage of the product life cycle is growth. During the growth stage, the product gains market acceptance and firms start generating good revenues. The profitability of the company improves during this stage. Since production increases the cost per unit decreases. The sales numbers increase as advertising campaigns target mass media audiences instead of specialized marketplaces (Answers).

The third stage of the product life cycle is the maturity stage. The maturing stage is a period in which the sales of products slow down because most potential buyers already purchased the product. Competition increases during this stage and profits tend to go down. The final stage of the product life cycle is the declining stage. During the declining stage products are phased out as new products with greater utility come into the marketplace. During this stage sales plummet as profits erode.

Price wars are common during this stage as competing companies want to capture the remaining market share of the marketplace. A product that recently went through a declining stage was cathode-ray television sets. These types of televisions have become obsolete as flat-screen LCD television sets have gone down in price tremendously. The use of the product life cycle has helped me as a customer and it has impacted my work life. A few years ago I worked for a company that was developing a new innovative product.

The firm was a start-up company. When I started working for the company their main product offering was in the introductory stage of the product life cycle. When the product was introduced to the marketplace the sales were very slow during the first few months. The price of the product was higher than the firm wanted to sell it, but due to the low volume of sales, the firm could not lower the price. Our accounting staff predicted that lowering the price during this stage would not significantly increase sales, instead, it would lower the profitability of the product.

The firm never got off the ground. The company went out of business after the second year. This company never got a chance for its product to experience the other three stages of the product lifecycle. The product life cycle theory helps me in my purchasing decisions. I tend to stay away from products during the introductory stage since prices are higher.