There are a number of views of the product life cycle. Chapter 11 introduced the marketing view, the production view, and the consumable view. We bring them together here to look at the impact of the product life cycle on profit. Many products have a predictable profit or product life cycle. Using the marketing viewpoint, the product life cycle describes the profit history of the product according to four stages: introduction, growth, maturity, and decline. In the introductory phase, profits are low for two reasons. First, revenues are low as the product gains market acceptance. Second, investment and learning may be high, leading to higher expenses. The growth stage is characterized by increasing market acceptance and sale, as well as economies of scale, which bring down expenses. The product breaks even, and profit rises. In the maturity phase, profits stabilize. The product has found its market, and revenues are relatively stable. Investment is down, and all learning effects in production are realized, leading to stable costs. Finally, in the decline phase, the product reaches the end of its cycle, and revenues and profits decline. Costs may still below, but not enough to slip in below sales. Exhibit 18.5 illustrates the interaction of profit and the product life cycle with its four stages.