Product Life Cycle

AAA

DEFINITION of 'Product Life Cycle'

The period of time over which an item is developed, brought to market and eventually removed from the market. First, the idea for a product undergoes research and development. If the idea is determined to be feasible and potentially profitable, the product will be produced, marketed and rolled out. Assuming the product becomes successful, its production will grow until the product becomes widely available. Eventually, demand for the product will decline and it will become obsolete.

INVESTOPEDIA EXPLAINS 'Product Life Cycle'

At the beginning of a product's life, it may have a little to no competition in the market place until competitors start to emulate it when it shows signs of success. As the product becomes more successful, it will face increasing numbers of competitors and may lose market share.
The stage of its life cycle the product is currently in will impact the way it is marketed to consumers. For example, a brand-new product will need to be explained to consumers, while a product that is further along in its life cycle will need to be differentiated from its competitors.

RELATED TERMS
  1. Product Life Cycle Management

    The observation of an item as it moves through the typical stages ...
  2. Comparative Advertising

    A marketing strategy in which a company shows how its product ...
  3. Marketing Mix

    Usually referring to E. Jerome McCarthy's 4 P classification ...
  4. Word-Of-Mouth Marketing - WOM Marketing

    When a consumer's interest for a company's product or service ...
  5. Advertising-To-Sales Ratio

    A measurement of the effectiveness of an advertising campaign ...
  6. Development Stage

    A company that is in a preliminary or early state of its corporate ...
Related Articles
  1. Investing

    How do name-brand products compete with their generic competitors?

    On April 2, 1993, Phillip Morris announced that it was cutting the price of its cigarettes to compete with the growing number of generic brands selling for much less. The announcement had an ...
  2. Personal Finance

    Hidden Costs Of Product Rebates

    These cash incentives lure in consumers, who are often unable to collect on the deal.
  3. Retirement

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn the measures and how to analyze them.
  4. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  5. Economics

    Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  6. Economics

    Do Cheap Imported Goods Cost Americans Jobs?

    Flooding the market with cheap products can mean job losses and even market collapse - but dumping isn't as threatening as it seems.
  7. Professionals

    Lead The Charge With Product Development

    If you like to keep your finger on the pulse of the market, this could be the career for you.
  8. Fundamental Analysis

    Google Ads Vs. Facebook Ads

    Universal access to the internet through smartphones, tablets and computers has driven the success of numerous companies. Most notably, Google and Facebook have witnessed staggering growth as ...
  9. Entrepreneurship

    How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading the word about the firm.
  10. Entrepreneurship

    How do companies like ClickBank help websites make money?

    Find out how sites such as ClickBank help websites make money by offering the opportunity for vendors and affiliates to promote websites and products.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center