Eventually as the excitement of the new product levels off, then profit will still be high but not be rising as fast as it was beforehand. The additional costs of promotion and sales force effort in keeping the sales curve rising may be large, especially in warding off any attacks from competitors. It may b e the stage to re think your ideas of your product and may be have some new ideas.
Stage 4: Maturity.
This stage is more of a plateau than a curve. Once the product reaches this stage, then it is in their best interests for the business to keep it here and make it profitable for the remainder of the time being. Once distribution has been achieved, the company will battle to maintain customer loyalty. Throughout this stage it is very important to keep a close eye on the profit curve. It is likely to decline, but it still represents the company's principle source of the income it requires for new ideas for the product and long term survival of the business. Products at this stage are normally reffered to as "cash cows- being milked for the benefit of the company.
Stage 5: Decline.
Inevitably the product will reach its destiny and the end of its usefulness and commercial usefulness. Sales will fall as newer and more technological products will be introduced. The decision to drop a product is an extremely difficult one however it has to be made. This is the stage where on the graph the sales category falls dramatically until the product is dropped.
At the present moment my product is still in its development stage, so profits are not high as they should not be, therefore, I have to be cautious of where is spend and cover costs and not to exceed them in the wrong way, but to use the funds in a suitable and efficient way. .
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Price.
Price is very important to the business and the use of it can effect the business in different ways. Although it is a promotional tool n many respects, it can determine the success of a product and how successful it really is.
