Posted in Marketing and Strategy Terms, Total Reads: 1047
Definition: Growth Stage
Growth Stage is the second stage in product life cycle (PLC). In this stage, the products growth, sales, revenue and profits are on the rise. This stage comes after the introduction stage of the PLC where the emphasis is on developing the product and the company incurs cost on it. In the growth stage, the company’s emphasis is not only on recovering the costs incurred in the introduction phase but also on generating profits. The company wants to attain maximum share in the market and wants to attain the targets it has forecasted.
The below diagram shows the product life cycle of a product:
The company in this stage grows to a point and then the sales, revenue and the profits generated are saturated. The stage which comes after this stage is that of maturity stage. The company is faced with many challenges in this stage. The company is faced with competition from a lot of existing firms to restrict the entry of product in the market.
Another challenge posed by the company is that the competitors may reduce their price so that in the growth stage of the company the product may become unfeasible. Because of this the product may not generate profits for the company making it discontinue the product. A company needs to see to it that all these challenges are eliminated by selecting the appropriate strategy and proactively approaching towards the problems. The company has an early bird advantage since it knows when and where the problems would arise.