(I) Characteristics of the introduction period
The introduction period, also known as the introduction period, refers to the initial sales stage when a new product is just launched on the market. The main characteristics of this period are as follows:
(1) The product design has not yet been finalized: Due to limitations in production technology and other aspects, there are few product varieties, small product production batches, high promotion costs, and high manufacturing costs, so the pricing is generally high.
(2) Consumers are unfamiliar with the product. Except for a few consumers who pursue novelty, other consumers are not willing to buy it, so sales are low.
(3) Ideal channels and efficient distribution models have not yet been established, so the sales network is not sound, sales channels are not smooth, and sales rate growth is slow.
(4) Because product decisions are difficult to determine, sales are small and costs are high, so sales profits are very low or even negative.
(5) There are not many producers and competitors of similar products, and few imitations.
(II) Characteristics of the Growth Stage
The growth stage, also known as the best-selling stage, refers to the period when the product is quickly accepted by consumers in the market, and the sales volume and profit grow rapidly. The main characteristics of this period are as follows:
(1) The product has been finalized, the process is relatively mature, the variety is increasing, and it can be mass-produced, and the production batch is increasing.
(2) Consumers are familiar with the new product and gradually accept it. The tendency to buy based on impressions increases, the demand and sales volume grow rapidly, and the product price tends to fall.
(3) A relatively smooth sales channel has been established, which can relatively reduce promotional activities.
(4) Affected by the scale effect and the increase in sales volume, the unit cost of the product decreases rapidly and the profit continues to rise.
(5) The number of competitors gradually increases, the market competition begins to intensify, and the profit growth rate of the enterprise begins to slow down.
(III) Characteristics of the Maturity Stage
The maturity stage, also known as the saturation stage, refers to the period when the product sales volume tends to be saturated and begins to slowly decline, and the market competition is very fierce. Usually, the maturity stage lasts the longest in the product life cycle. According to the different sales characteristics of the maturity stage, it can be divided into three periods: growth maturity, stable maturity and decline maturity. The main characteristics of these three periods are as follows:
1. Growth maturity
(1) Most potential consumers have accepted it, and a small number of consumers continue to enter the market.
(2) The sales channel is saturated and the growth rate rises slowly.
2. Stable maturity
(1) The market is saturated, sales are stable, and product sales are stable.
(2) The sales growth rate is only proportional to the number of buyers. If there are no new consumers, the growth rate will stagnate or decline.
3. Decline maturity
(1) The sales level begins to decline slowly.
(2) The product of the whole industry is emerging, competition is further intensified, and enterprises without competitiveness are gradually replaced. There are few new competitors, and the original competitors have their own specific target consumers, and the market share does not change much.
(IV) Characteristics of the Decline Period
The decline period, also known as the slow-moving period, refers to the stage when product sales drop sharply and products begin to be gradually eliminated from the market. The main characteristics of this period are as follows:
(1) Product demand, sales and profits drop rapidly, and prices drop to the lowest level.
(2) Companies with higher costs will stop production one after another due to lack of profitability.
(3) New products or substitutes appear in the market, and consumers’ interest turns to other new products or substitutes.
(4) Most competitors are forced to withdraw from the market, and companies that remain in the market reduce services and drastically cut promotional expenses to maintain the lowest level of operations.