Product Life Cycle

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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.

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BREAKING DOWN '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.

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RELATED FAQS
  1. What are the similarities between product differentiation and product positioning?

    Product differentiation and product positioning are important elements in a marketing plan, and most marketing strategies ... Read Full Answer >>
  2. What factors should a company consider when creating a marketing budget?

    As organizations grow and new entrants to the market appear, companies must continuously stay relevant in consumers' minds. ... Read Full Answer >>
  3. What is the difference between research and development and product development?

    The difference between research and development and product development is that research and development is the conception ... Read Full Answer >>
  4. 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 ... Read Full Answer >>
  5. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
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    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>

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