Course: SLF 125 Business Planning and Startup

Reading

Stages 3 and 4
Stages 3 and 4
Credits
Adapted from Marketing, Boundless Marketing Open Textbook, Chapter 9 Products
www.boundless.com/marketing
Creative Commons Attribution-ShareAlike 3.0 Unported License

Stage 3: Maturity

During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Ultimately, during this stage, sales will peak and start to decline. The company will want to prolong this phase so as to avoid decline, and this desire leads to new innovation and features in order to continue to compete with the competition which, by now, has become very established, advanced and fierce. Competitors' products may begin to cut deeply into the company's market position and market share. However, despite this, sales continue to grow in the early part of the maturity phase. But, these sales will peak and ultimately decline. Market saturation may occur with no new consumers available to the competing companies.

What can be done?

- Improving specific features in order to resell the product (for instance, in the case of a car, the manufacturer may include alloy wheels, new colors, sport or hybrid versions, or other changes in order to keep sales going)
- Lowering prices in order to fight off competition
- Intensifying distribution and promotional efforts
- Differentiation efforts, in the hope that new customers will start to buy the product
- Finding a new target market

Stage 4: Decline

The decline stage of the product life cycle is the one where the product ultimately 'dies' due to the low or negative growth rate in sales.

Profitability will fall, eventually to the point where it is no longer profitable to produce, and production will stop. As a number of companies start to dominate the market, it becomes increasingly difficult for the company in question to maintain its level of sales. Consumer tastes also change, as do new technologies which may make the product become ultimately obsolete (as in the case of CDs and DVDs, and now Blu-Ray).