SQA Higher Business Practice Exam

The term 'product lifecycle' refers to the stages that a product goes through from its introduction into the market to its eventual withdrawal. This concept is essential in understanding how products evolve over time and how businesses can manage their product lines effectively.

The product lifecycle typically includes several phases:

1. **Introduction** - The product is launched, and marketing efforts are initiated to create awareness.

2. **Growth** - Sales begin to increase as the product gains market acceptance.

3. **Maturity** - The product reaches peak sales, and market saturation occurs, leading to increased competition.

4. **Decline** - Sales begin to decrease as consumer preferences shift or newer alternatives become available, ultimately leading to withdrawal from the market.

Understanding the product lifecycle allows businesses to strategize marketing, production, and pricing decisions at various stages, ensuring they maximize profitability and adjust to changing market conditions.