Stage | Characteristics |
1. Market introduction stage | - costs are high
- slow sales volumes to start
- little or no competition
- demand has to be created
- customers have to be prompted to try the product
- makes no money at this stage
|
2. Growth stage | - costs reduced due to economies of scale
- sales volume increases significantly
- profitability begins to rise
- public awareness increases
- competition begins to increase with a few new players in establishing market
- increased competition leads to price decreases
|
3. Maturity stage | - costs are lowered as a result of production volumes increasing and experience curve effects
- sales volume peaks and market saturation is reached
- increase in competitors entering the market
- prices tend to drop due to the proliferation of competing products
- brand differentiation and feature diversification is emphasized to maintain or increase market share
- Industrial profits go down
|
4. Saturation and decline stage | - costs become counter-optimal
- sales volume decline or stabilize
- prices, profitability diminish
- profit becomes more a challenge of production/distribution efficiency than increased sales
|
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