Product Life Cycle and Profitability
important in cost management. Each stage of the product life cycle demonstrates a fairly predictable impact on various types of costs. Exhibit 18-6 summarizes these effects.
How lone is the product life cycle? That depends on the product and the environment that the product faces. Television took year to reach maturity,partially due to its introduction during World war 2,when necessary technical assets were diverted to the war effort. Video games typically reach maturity very quickly - in a matter of months. Fad products, such as Sourballs, may zip through the product life cycle in a matter of weeks.
Knowledge of the product life cycle is important foe cost management. We can easily see the impact of the four stages on marketing and the growth and decline of sales.