Any product that a business sells needs to make money and that money needs to be managed successfully in the lifetime of the product. There is no point in having a product but the product does not have any return for that business whilst at the same time the business fails to manage its money. The product life cycle is a good instrument to use to understand how a business can successfully manage the way it uses its money when related to the products it sells.
This is an expensive time for any company as the company tries to introduce the product to the client. At this stage the company must be sure it has identified the correct market and be organized enough not to go overboard with its spending. There must be tracking going on to be better equipped to react to the market wants and demands. The company must have a clear laid out plan on how the product launch is done and who does what exactly. A project mode type of approach is required in order to ensure everyone knows what needs to be done. The greatest danger is in spending money on unplanned activities or activities that have no significance in growing the product appeal.
At this stage the product is growing and supporting the company revenues significantly but is not at the optimum stage. Care must thus be taken to ensure that the revenue is accounted for. A growth phase is very exciting for most companies as they roll out the different strategies that are required for the product to thrive. New markets are opened, new branches and new employees. However the company must be careful in that it must not get carried away by the excitement and forget to assess how to manage the cost and revenue balance of the project. There must always be research done before any new market is launched. The biggest threat at this stage is money being used on wastage processes which are not critical.
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At this stage there is always a temptation to sit back and let the product sell itself. Though this is possible the company or business must never forget that products sell if they are in the mind of the customer. Once they are replaced by something else then that product ceases to be a viable product. The company must make it a priority to maintain market share and be competitive. There may be need for different product variations, improvements, and new research. Clients must be kept in touch with a high level engagement process. At the maturity stage a known market now exists and keeping that market happy must be a top priority. The business must make sure it implements the right systems that enable the business to be the best operationally for its clients.
A product market can decline due to competition, substitutes and other different needs becoming a priority. At this stage the company must be bold enough to know if they need to continue with the product or to create completely new strategies. If a business is not careful at this stage it can lose a lot of money supporting a product that is no longer viable. If the product cannot be resuscitated then decisions have to be made. The assumption here is that the company has been keeping research and development such that other products had been introduced.