In this stage the product is new and distinctive. Here, a new product means “a product that opens upon entirely new market, replaces an existing product or significantly broadens the market for an existing product.

This stage is characterized by:

  • slow rise in sales and profit margins
  • limited competition
  • high income group buyers (innovators)
  • frequent product modifications
  • high production and marketing costs
  • narrow product line
  • high prices
  • limited distribution and primary demand cultivation.


In this stage, the product achieves considerable and widespread approval in market. Sales increases sharply and at an increasing rate. The number of competitors increase considerably. This stage is characterized by:

  • Increase in competition
  • Increased volume of sales
  • Improvement in the quality of the product
  • Price reduction
  • Reduction in the promotional expenditure to sales ratio.


In this stage, the maturity of product is reflected in terms of its capacity to face competition. In this stage, sales do rise but at a decreasing rate, profit margins however decline. This stage is characterized by:

  • Increase in sales at a decreasing rate
  • Cut throat competition
  • Exit of poor competitors
  • New changes in the product
  • Increase in promotional efforts.


This is the phase when sales decline because customer preferences have changed in favor of more efficient and better products. The number of competing firms also gets reduced and generally the industry now has limited product versions available to the customer. This stage is characterized by:

  • A drastic reduction in sales
  • Decline in profits
  • Exit of the product from the market.