The life cycle of a product or service refers to the period that it is in demand and can be successfully sold. The usual phases of any new product are an introduction, expansion, and development, and finally its decline or when it is no longer feasible for the company to continue making that product. During the initial or introductory stage, profits are at a minimum because of the research, development. Production and marketing costs are very high. For this companies usually sell their products at premium prices to recover some of the investment costs. During this period, market response has to be assessed to the new product so that changes can be made if needed.
Experimenting with diversified shapes and outlines is recommended to find the best and most successful model for the market. When demand for the product rises, the profits and cash flow improve. If the company continually upgrades the product the product will sell longer and will be ahead of their competitors. With the initial inflow of cash when the product is selling well, the company should develop services capabilities including refinements in the product itself. During this period sales will continually rise or be reaching a certain ceiling. Profits decline since prices may have to be lowered to be at par with your competitors. This is the point where the company must carry out market research to establish prevailing models in demand.
Also look for new markets and opportunities, because the decrease in demand will burden the company with an unsellable product. Despite the reduction in prices, sales continue to drop. This is the time to either introduce a new product or create some new advantage with the previous product, Simply adding a new feature might rejuvenate the product Being in touch with the market and knowing how your product is doing will align the product with the new strategy that you have developed. The strength of your product is having a good sales staff with comprehensive knowledge of the product.
Your sales staff must cultivate and maintain a good relationship with your customers. This also needs effective and good internal communications implemented with winning marketing strategies. The company’s reputation in the market will also be a determining factor in the success of the product. Along with the strengths of the company and the product, one must also consider the weaknesses that could affect the success of the product. This includes issues with meeting production demands because of an overload of work, outdated marketing information, cash flow issues, too much-unsold stock, inadequate records keeping and very high rental costs.