Product Life Cycle Flashcards

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Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What is the product life cycle?

It is the stages a product goes through from idea to when it is removed from sale.

Name the five stages of the product life cycle in order.

Development, introduction, growth, maturity, decline.

On a product life cycle graph, what do the axes show?

The x-axis shows time and the y-axis shows sales.

What happens in the development stage?

The product is researched, designed and tested. There are no sales and costs are high.

What happens in the introduction stage?

The product goes on sale. Sales are low and profit may be negative due to launch costs.

What happens in the growth stage?

Sales rise fast and profit grows as more customers buy it.

What happens in the maturity stage?

Sales level off at a high point. Profit is near its peak but may start to fall.

What happens in the decline stage?

Sales fall. Profit drops and the product may be taken off the market.

Do all products have the same length of life cycle?

No. Some last a short time, others last many years. It varies by product and market.

When are profits usually highest in the product life cycle?

In late growth and early maturity for many products.

Give one reason why a product might move into decline.

New technology, changing tastes, or strong rivals can reduce sales.

Why do businesses use the product life cycle model?

To forecast sales and plan when to invest, support or remove a product.