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What are the five stages products normally go through?
Home » Entrepreneurship » Product Development » What are the five stages products normally go through?Products go through a life cycle and an important aspect of Product Development is to not only be aware of the life cycle but what might the future of the product look like and how to prolong the life cycle of the product as best as possible.
The five stages are:
Development: This is normally the most expensive stage of the five as no revenue is generated and a good deal of research and development requires moderate cash flow to maintain and further the process.
Initial Commercialization: This stage is also fairly costly and since the initial introduction of a product into the market is widely and commonly a slow process, sales are usually low. In addition, losses are common and the price of the product (sales and manufacturing) is typically high to try and balance out the losses.
Sales Increase: The third stage sees the first sign of profitability for the product as costs can be reduced and the sale of the item typically increases, which also increases market value of the product.
Peaking: Cost for the product becomes quite low as the sales volume of the product will peak. Prices for the product drop as other competing, similar products will now be present in the market. This is the best stage in terms of profit and earnings.
The Decline: In this final stage the sales of the product decline as prices drop, which often takes on a drop in demand or desire and then profits decline as well in this last stage of the cycle.
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