The product life cycle Edexcel International GCSE Business revision
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In plain words
Products have a life, like people. They are born, they grow, they reach their peak, and sooner or later sales fade. Plotted on a graph of sales against time, this is the product life cycle.
Knowing where a product is in its cycle tells a business what to do with its price and its advertising.
6 things to know
- Introduction: the product is launched. Sales are low and growing slowly, promotion costs are high, and there is usually no profit yet.
- Growth: sales rise quickly, the product starts to make a profit, and competitors begin to appear.
- Maturity: sales are at their highest but have stopped growing much. Competition is intense.
- Decline: sales and profits fall, and the product may be withdrawn.
- Extension strategies lengthen the life of a product: selling in new markets, finding new uses, updating the design or packaging, and extra advertising.
- Marketing changes with the stage: informative advertising at launch, persuasive advertising in growth, competitive prices and promotions in maturity, and less spending in decline.
Tips and tricks
- On the diagram, sales go on the vertical axis and time on the horizontal. An extension strategy shows as a new rise where the line would have fallen.
- Extension strategies are used in maturity, before decline sets in. Once sales are falling fast it is usually too late.
It lands in your notebook with its questions as flashcards.
The product life cycle: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
In which stage of the product life cycle are sales highest?
Sales peak and level off in maturity.
In which stage do sales rise fastest?
The product has caught on and sales climb quickly.
Which is an extension strategy?
New customers keep sales up for longer.
What is the main aim of advertising in the introduction stage?
Nobody can buy a product they have not heard of.
Sales of a product are falling and it makes little profit. Which stage is it in?
Falling sales and profit mark the last stage.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
3 questions, 8 marks. Write your answers on paper, then check them.
The product life cycle
Edexcel International GCSE Business 4BS1 · 8 marks · papermunch.org
Name ______________________________ Date ______________
State the four main stages of the product life cycle, in order.[2]
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Introduction, growth, maturity and decline.
Explain why a product may make no profit in the introduction stage.[3]
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Sales are still low, but the business has spent heavily on developing the product and on promotion to make customers aware of it.
Explain two extension strategies a business could use for a product in the maturity stage.[3]
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It could sell the product in a new market, such as another country, to find new customers. It could update the design or packaging to make the product look new again.
Answers: The product life cycle
- 1. Introduction, growth, maturity and decline.
- 2. Sales are still low, but the business has spent heavily on developing the product and on promotion to make customers aware of it.
- 3. It could sell the product in a new market, such as another country, to find new customers. It could update the design or packaging to make the product look new again.