This analysis covers the pattern of demand throughout a product’s life span. It similarly identifies the patterns and stages of the useful life span of a process.
This concept, which is commonly, used in marketing management literature states that a product is supposed to go through a number of stages, as shown below:
Stage 1:
This is the introductory or launching stage when the product/service has to win a place in the market and prove its worth. Sometimes, this stage is broken into two stages, product development and testing and introduction. Here, however, this is taken as one stage.
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Stage 2:
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Once the product/service has general acceptability it passed to this stage, which is the rapid development phase. At this point, manufacturing and distribution system need to be streamlined, through method study, work measurement, value engineering, ergonomic or human engineering techniques with suitable changes in technology, if required. At this point, when the demand for the product/service peaks, it calls for an increase in output volume by the organization.
Stage 3:
This is called the steady stage. During the rapid development phase, the competitors try to capture market share by introducing similar products/service. Due to this, the growth rate of the product/service slows. This is also termed as the established stage.
Stage 4:
This is the declining or phase-out stage in the life cycle. At this point, the demand for the original product/service dies out or disappears from the part, either due to changes in customer taste or due to any technological breakthrough.
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The different stages in a product/service life cycle can be shown in the form of a graph, as in figure 17.1.
