Decline Stage

The sales of most of the product forms and brands eventually dip. The decline can be slow, like in the case of oatmeal cereal, or rapid, as in the particular case of phonograph records. Sales can plunge to zero, or they can drop to a low level where they continue for several years. It is the decline stage.

Sales decline for many reasons, by including technological advances, by shifts in consumer tastes, and enhance competition. As sales and profits decline, some firms withdraw from the market. Those remaining can prune back their product offerings.  They can drop smaller market segments and marginal trade channels, or they can cut the promotion budget and reduce their prices further. Carrying a weak product may be very costly to a firm, and not only in profit terms. There are much hidden costs. A weak product can take up too much of management's time. It frequently requires frequent price and inventory adjustments. It needs advertising and sales force attention that may be better utilized to make "healthy" products more profitable. A product's failing reputation may cause customer concerns regarding the company and its other products. The largest cost can well lie in the future. Keeping weak products delays the search for creates, replacements a lopsided product mix, hurts present profits, and weakens the company's foothold on the future.

For these cause, companies have to pay more attention to their aging products. The firm's first task is to recognize those products in the decline stage by frequently reviewing sales, costs, market shares and profit trends. Then, management have to decide whether to maintain, harvest, or drop each of these declining products. Management can decide to harvest the product, which means reducing many costs (equipment and plant, maintenance, R&D, advertising, sales force) and hoping that sales hold up. If successful, harvesting shall increase the company's profits in the short run. Or management can decide to drop the product from the line. It may sell it to another firm or easily liquidate it at salvage value. If the company plans to discover a buyer, it will not desire to run down the product through harvesting. The Product Life Cycle may be extended by two ways either by modify the target market by discovering and adding new users  etc or by modifying the product Adding new features,  model varieties, variations will change the consumer reaction - create more demand so you attract more users To prevent the product going into decline you alter the product.