Every product available in the market has a life cycle, and the length of it will depend on the amount of attention being received from customers. As a product is at its peak of sales, their cost recovery will improve as profits will start to cover the money put into to producing the product. Depending on a product’s market phase, the more attention it receives from the general public will help contribute to more earnings, leading to a greater difference between revenue and costs of goods sold. Therefore, cost recovery is affected by a product’s position in their market phase. A product new to their life-cycle is part of the growing product market as they have to establish their share of the market. During this period, there will be a rapid growth in sales as a product has recently become known to customers interested, seeing as it is something completely new. The state the product is in during the growing product market will be seen as ‘one of a kind’ and there will be very few or no competitors. The company with the newly established product will be retaining profits for the first time in this stage. Along with earning profits, the business should be investigating and planning how to be able to produce the same product with reduced costs, as it is important in case the popularity of the product decreases so profits will still be made. In addition, any company in this stage will be seeking an increase of market share and building their brand. Below is a figure showing the product life cycle creating an idea of what position a product is in throughout each phase. (Figure: "Product Life Cycle." QuickMBA)
When a product has passed through the growing product market phase, it will eventually go into the mature product market. As seen in the figure, there is a decrease in a product’s popularity after maturity. The product by now should have reached its peak and customer’s interest for it is not as high. The general public should own some type of product similar to...
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