Product/Service Plans:

Planning the design, development and introduction of new products and services is an integral part of business strategy which influences directly the production strategy because of following reasons:

I.  Establishment of detailed characteristics of each product is done at the time of designing the products.

II. Production is directly affected by the characteristics of each product.

III. Design of the production system which is the heart of the production strategy is determined by how the product is made.

The life cycle of a product may be divided in various stages namely introduction, expansion, maturity and decline. Introduction stage is concerned with the beginning of sales, development of production and marketing and has negative profits. The growth stage is attain by the dramatic growth of sales, intensification of marketing efforts and concentration on the fast expansion of capacity to keep up with the demand. Profits begin in this stage. Maturity stage is attained whereas production starts concentrating on the high volume of production, efficiency, and low costs. Marketing switches to competitive sales promotion so as to enhance or maintain the market share and the profits are at the peak. Decline stage while entered by the product yields declining profit and sales.