Product Life Cycle

less of a session on the product life cycle this is going to be a quick video if you want a more detailed video please click the card up there now so the product life cycle all products will go through a life cycle with respect to their sales and assuming that they go through all the stages because they don't have to go through all the stages of the product life cycle but if they did they would go through all of these stages so the first one would be the research and development phase that is before the

release when the product is being designed maybe it's going through the design mix now then you have the introduction stage after that you'd have the growth stage and then as sales start to increase and hit their top you're at the maturity stage and then finally after maturity of course you get the decline phase when sales decrease they're not zero they decrease they begin to decline now the research and development phase this is the phase where you're going to have no sales no sales because it's yet to be released this line here symbolizes where it's released

so no sales that's not great for revenue that in fact means you've got no revenue and your research development costs from this phase are likely to be high so nothing coming in lots going out that's going to lead to losses and a negative cash flow now the introduction stage is now when you've released the product it's likely that you're going to have low sales because there's limited awareness of your product at this stage and because there's limited awareness you're probably going to need to do some marketing so you're going to have marketing costs you've also

got to pay off these research development costs from before so it's likely here that you're going to be having still losses and possibly negative cash flow as a result now as you move into the growth phase you'll see your sales begin to increase so you're having improving sales that's good for revenue but you've still got those marketing costs maybe at this point you're starting to build a brand build a brand awareness because that could help reduce that price sensitivity of your customers in the future now at this stage yes you've got improved sales yes you've

got marketing costs but it might be that your profits are now starting to appear and if your profits are appearing it's likely that your cash flow is starting to improve your cash flow situation is definitely improving now as we reach the optimum the peak of our sales in the maturity stage peak sales um clearly at this point profits are likely to be improving even more and as a result cash flow might be also positive but at this stage you need to start considering those extension strategies and even more so in the decline stage because in

the decline stage you're starting to see the decline in your sales your sales have not gone they are declining they are decreasing you've passed your peak now declining revenues would be a consequence of declining sales and at this point you might want to consider those extension strategies for that click the card up there now so i hope that helps with the product life cycle again as i said if you want it in a more detailed way then click the card on the i from earlier on i hope that helps and i'll see you at the

next session