This shows sales of a good over time. It is usually represented in the form of a graph:
1. INTRODUCTORY
As can be seen, between time period 1 and 4 sales rise very slowly.
This is because the product is likely to be little known, expensive and may
not have all technical problems ironed out. At this stage the priority for the
firm is advertising and research and development.
2. GROWTH
Between time periods 5 and 7 sales are rising rapidly. The earlier problems
have been resolved and the product is now repaying its initial investment.
3. MATURITY
Between time periods 8 and 9 the rate of growth of sales starts falling. This
is a sign that the firm needs to consider a new promotion or pricing strategy
if the product is to avoid…
4. DECLINE
After time period 9 sales actually start falling. At this point the firm is
going to consider taking the product off the market and diversifying into other
areas.