Product concepts typically undergo several iterations, involving considerable time and money, before they are exposed to target consumers via test markets.  Concepts that survive test market scrutiny are ready for market introduction.  "Time to market," or the amount of development time necessary to move from product concept to finished product, can be critical, especially when competitors are working on similar products.   Forward-thinking marketing managers are using interactive concept testing via the Internet to obtain faster feedback from target customers and to shorten their product development timetables.

During the product development stage, sales are zero and profits are negative (i.e. anticipated future profits are being invested in product development).

Even though a firm promotes its new product, it takes time for customers to learn that the product is available.  Money is invested in developing the market in anticipation of future profits.

In the Market Growth stage, industry sales grow quickly -- but industry profits rise and then start falling.  The innovator begins to make big profits as more and more customers buy.  But competitors see the opportunity and enter the market.  Some just copy the most successful product, or try to improve it to compete better.  Others try to refine their offerings to do a better job of appealing to some target markets.  The new entries result in much product variety.

This is the stage where industry profits are largest, but it is also when industry profits begin to decline as increased competition creates downward pressure on prices.

New firms may still enter the market during this stage.  These late entries skip the early life cycle stages, including the profitable growth stage.  They must try to take market share from established firms, which is difficult and expensive in a saturated, flat market.   Customers who are satisfied with their current relationship won't be interested in switching to an unknown brand.

In the United States, the markets for most cars, boats, television sets, and most household appliances are in market maturity.  This stage may continue for many years -- until a new product idea comes along that makes the old product concept obsolete -- even though individual brands or models come and go.

They may also keep some sales by appealing to the most loyal customers or those who are slow to try new ideas.  These buyers might switch later, smoothing the sales decline.

How long a whole product life cycle takes, and the length of each stage,varies across products.  The cycle may vary from as little as 90 days, as in the case of Ghostbusters products, to as long as 100 or more years, as for gasoline-powered automobiles.

Patents for a new invention may not be much protection in slowing down competitors, who can often find ways to copy a product idea without violating a specific patent.  Worse, some firms find out than an unethical competitor simply disregarded the patent protection. Patent violations by foreign competitors are very common, and sometimes a product's life can be over before a case can get through Patent Court bottlenecks.

The company with the first entry in a product market, sometimes referred to as  the "Pioneer" or "Innovator," usually has an advantage, because they have the opportunity to establish their brand name in the minds of consumers before competitors enter the market.  However, during the Market Growth stage, competitors are likely to introduce product improvements.  Fast changes in marketing strategy may be necessary, because profits don't automatically go to the innovator.

Fads have even shorter life cycles -- do you remember Pet Rocks or Cabbage Patch Dolls? Such products can be very profitable while their popularity lasts, but it is difficult to predict which products are going to catch the public's fancy.  Further, companies can be caught short with items that really "take off," and may not be able to meet demand.  With fads, these lost profits opportunities can probably never be made up, and it is likely the public will be interested in something new before the company can increase production of the current fad item.