THE PRODUCT LIFE CYCLE STRATEGIC

One concept which is of value in many forecasting situations is that of the product life cycle. This suggests that all products pass through a series of growth curves (the first part of which is S-shaped), until they reach a point when they either level out or begin to decline. A product's life cycle can be divided into several stages characterized by the revenue generated by the product. If a curve is drawn showing product revenue over time, it may take one of many different shapes, an example of which is shown below:

The life cycle concept may apply to a brand or to a category of product. Its duration may be as short as a few months for a fad item or a century or more for product categories such as the gasoline-powered automobile. Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities.