The curve: sales on the vertical axis, time on the horizontal

1. The diagram plots sales on the vertical axis against time on the horizontal axis, following one product rather than the whole business.
2. The curve starts low and almost flat at launch because few customers know the product exists, then climbs steeply through growth as word spreads.
3. The slope then eases until the line runs flat along a peak through maturity, before falling away towards the axis in decline.
4. An extension strategy bends the curve upward again from maturity, so instead of one peak and a slide you draw a run of smaller rises.

What each stage does to sales, spending and profit

1. Introduction: sales are low and the business is still spending heavily on promotion and finishing the product, so it usually makes a loss.
   1. Cash leaves the business months before customers pay it back, so a launch is often funded from a loan or from the profits of an older product.
2. Growth: sales rise fast as distribution widens, the product turns profitable for the first time, and rivals begin to copy it.
3. Maturity: sales reach their peak and flatten, competition is at its strongest, and price cuts and special offers become common.
   1. Total profit is at its highest here because volume is greatest, but the profit on each unit is squeezed by those price cuts.
4. Decline: sales fall as customers move to something newer, and the business chooses between extending the product, cutting the price to clear the remaining stock, and withdrawing it altogether.
5. The four stages read most clearly side by side.

1. Profit lags behind sales, because the loss made in introduction has to be paid back out of the growth and maturity years before the product has earned its keep.
2. Maturity is the row that matters most, since it is where the money is made and where the business must act if it wants to keep the curve up.

Extension strategies: lifting the curve before it falls

1. Extending a product customers already know is cheaper and less risky than developing a replacement, so a business acts while sales are still flat in maturity rather than halfway down the decline.
2. Advertising: a fresh campaign reminds people the product exists or repositions it for a different buyer, such as a breakfast cereal advertised as an evening snack.
3. A new or updated version: a games console re-released in a slimmer case with more storage gives owners of the old model a reason to buy again.
4. New packaging: a resealable pouch or a seasonal design makes a familiar product look new on the shelf, which can lift sales without cutting the price.
5. A new market or a new audience: Greggs launched a vegan sausage roll, putting a familiar product in front of customers who do not eat meat.
6. Lowering the price: taking 50p off a £2.50 sandwich wins back shoppers who thought it had become dear, although every sale then earns less.
7. Adding a new feature: a mobile phone contract that gains unlimited data at the same monthly price keeps customers who were about to switch.
8. The life cycle is a model rather than a timetable, so a fashion item can run the whole curve in one season while a chocolate bar sits in maturity for decades.
9. Knowing which stage a product has reached tells the business where to spend, because money spent building awareness suits introduction while money spent on extension suits maturity.