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every product has its cycle depending on its cost and targeted customers. a product cycle goes similar to this:
introduction >> growth >> maturity >> decline
in both introduction and growth, usually only interested customer and followers of certain products will buy it, given that it's expensive or considered luxurious. Plus, on these two stages, companies usually focus on covering costs and making profits at these stage.
on maturity stage, the product reach its peak on awareness, price, and affordability.
I think the price should be lowered at the end of the maturity period.
I agree with Mr.
Abdulrahman
thanks for the invitation
It depends on a number of variables including nature of product, market variables, competition etc. Ideally it is considered to be at maturity stage since competition increases at this stage and market gets homogenous. The product development cost and initial marketing expenses has already been recovered in previous stages, so it is an ideal time to reduce the price in order to increase sales and retain the market share.
The product life cycle has 4 very clearly defined stages; Introduction, Growth stage, Maturity stage and Decline stage.
I am thinking it is during the Decline Stage. When the market for a product will start to shrink, this shrinkage could be due to the market becoming saturated or when all the customers who will buy the product have already purchased it or because the consumers are switching to a different type of product. While this decline may be inevitable, I will lower my prices in order to maintain the same or a higher level of sales.
When you guys have reached the breakeven and it depends on the market competetion
When the demand is low we need to lower the price in order to increase the sales of the product
I the simplest form, where Sales price = Variable costs + Fixed cost, or in other words, profit = 0.
Product nature will also affect the decision, where product with aftersales (equipment) can affect the decision, while FMCG's are a different story.
Pricing is a complex question. Some products will go up and down in price many times in their life cycle. Some life cycles are measured in hours, some in decades.
Do not focus on the product life cycle: this tends to accelerate it in the later stages. If you are always thinking about the 'decline' phase, it will probably happen sooner. Do focus on what is important - making more sales at a higher margin.
Reduce the waste and consistent in quality required from customer.
