Determine the phases of product life cycle, Managerial Accounting

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Phases of product life cycle

The life cycle of a product having of four phases viz., introduction growth maturity decline during introduction phase a product is launched into the market. Its customer is innovators. Competition is almost negligible and profit is non-existent. Under growth phase sale and profit increase at a rapid pace. Competitors enter the market often in large numbers. As a result of competition profits begins declining near the end of the growth phase.


During the phase of maturity sales continue to enhance, but at a decreasing rate. When sale level off profits of both product and middlemen decline. The main reason is intense price competition some firms extend their product line with new models.


Decline in sales volume characterizes the last phase of the product life cycle. The requirement or demand for product disappears. Availability of better and less costly substitutes in the market accounts for the arrival of this phase.


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