Page 5: The Product LIfe - Cycle
Markets are in a constant state of change. Over a period of time, tastes and fashions alter and the technology used to produce goods and services moves on. As a result, there will always be a demand for new products as old ones become redundant.
According to the product life-cycle concept, all products move through four life-cycle phases.
- During the introductory phase growth is slow and volume is low because of limited awareness of the product's existence.
- Sales rise during the growth phase and profit per unit sold reaches a maximum.
- As products reach maturity, growth in sales starts to level off. Organisations have to invest heavily to extend the life-cycle while competition becomes stronger.
- When sales start to fall a product is said to be in decline.
In a global environment, managing and maintaining the market share for fashion products is particularly demanding. Cosmetic manufacturers are constantly challenged by different changes in the fashion industry. If these changes are not properly managed, products could quickly move into decline.