Business Admin and Marketing-Product decisions

Companies need to be aware of where their product(s)/service(s) is in relation to the product life cycle (PLC)


The new product development process is the beginning of the PLC.  There are a number of stages involved in the new product development proces.  These are:

1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy
5. Business analysis
6. Product development
7. Test marketing
8. Commercialisation

Once the product has gone through the eight stages the product is introduced to the marketplace.  This is the first step of the PLC.  At this stage profits will be low maybe negative and marketing costs may be high (i.e. advertising).  The next stage is the growth stage.  If the product meets the approval of their target market, it will then enter the growth stage.  Early adopters may recommend the product to family and friends.  If competitors see that the market is expanding they may be tempted to enter the market.  At some stage the product will enter into the maturity stage.  Sales will began to slow down and profits began to decrease.  There may be overcapacity in the market which mean the weaker companies may leave the market.  A company has the option at the stage to develop the market, they may get involved in product development or marketing innovations.  If demand for the product does not pick up sales it will enter the decline stage.  A company has to decide whether it wants to keep weaker products or to invest in updating an existing product.