The life cycle of a product is a theoretical model developed in order to evaluate, design and predict the behavior of a given product. It is part of the acceptance that the product is not a static element in time, but it has a dynamic character, with a pattern of performance during its duration. This pattern usually follows a logical order. Educate yourself with thoughts from Economic Cycles Research Institute. This order is known as its life cycle. The study and analysis of the life cycle of a product is useful because it gives us the possibility to locate the performance on a positional level, which gives us a perspective of where we’re going and what we can do to drastically change, delay or accelerate the arrival of the change in the dynamic movement of the product. Below is the chart that illustrates the life cycle of a product: as in any life cycle are presented four stages clearly defined at least from a theoretical point of view: introduction, growth, maturity and decline conditions objective and subjective that they characterize each stage of the cycle are different from a strategic point of view, determined by cash flows, profit margins and total sales values – among others. Introduction: From the viewpoint of a leader at this stage we just develop, through technological innovation, research and development, a new product that we intend to insert into the market.
Research costs have been high and it will also be the costs of promotion and access to markets. The product is known little by what demand will take to react to the offer. In this space of time sales will be minimal and the high unit production costs given the limited volumes of units produced compared to the fixed costs of production. At this stage the key issue is to define the margins of confidence in the product. It must take into account that there is a wide possibility that, in its beginnings, product will not be recognized and that necessary to invest greater resources to publicize and capture the first customers.