The product life cycle theory is meant to explain patterns of production, consumption, and change of products.
The cycle begins from the moment that the product is introduced as a concept, to the moment when it is produced in local factories. Then it continues during the time when the product becomes internationally available, loses its unique features, and eventually declines.
The cycle's stages are:
Introduction- When the product is announced based on the needs and demand of the consumers. Previous analysis should be performed prior to introduction. This includes demographics, financial status of consumers, and overall market profile. This is the way that the companies which produce specific products know where to hit the market and who will be the intended consumer group.
Growth- As the word implies, when a good introduction is in place, the demand for the product will likely become higher. Again, if the product is being marketed towards the correct population in terms of need-basis, income, and demand, the product would very well become a heavy hitter in commerce.
Maturity-This is when the product begins to sell so well that new contractors are needed to keep producing. Here is the catch: Whoever offers the lowest bid for the contract usually gets it since there will be more of the product to be produced. However, this is when the company has to conduct the most quality control since we do not know if those low-bidding companies are conducting best practices in the treatment of their employees. If they are not, then chances are that the employees will not do a good job and then the product begins to lower in quality.
Saturation- This is the highest-selling point of the product. It has been selling in the market at a consistent rate, and people continue to demand it and/or similar versions of it. The best example would be the iPads, iPods, and MP3 players which, since their entrance into the market, consistently sell.
Decline or Extinction- When a product is no longer needed, it stops selling. When the economy hits a low point and people cannot afford certain things, the production of certain items must also stop due to lack of consumer demand. This is basically when the product is only used in one very small stratum of costumers, or when its production far exceeds its demand.
Hence, there are actually five stages, but they clearly explain how a product goes from being a best seller to becoming extinct in the market.