ACCA MA Syllabus B. Data Analysis And Statistical Techniques - Product life cycle - Notes ^{12 / 12}

The product life cycle concept suggests that all products pass through a number of stages from development to decline.

If an organisation knows where a product is in its life cycle, they can use this knowledge to plan the marketing of that product more effectively and, the organisation may be able to derive an approximate forecast of its sales from  a knowledge of the current position of a product in its life cycle.

There are limitations of the model, which include

• It is over-simplistic to assume that all products comply with a life cycle curve that follows the standard model shown above.

• It is difficult for management to establish with precision the position of a product on its cycle curve.