Answer – The Product Life Cycle (PLC)

Product life cycle curve showing introduction, growth, maturity and decline

The Four Stages

The product life cycle, popularised by Levitt (1965), describes a typical sales pattern in four stages: introduction, growth, maturity and decline. Kotler and Keller (2016) note that promotional spending is usually heaviest in the introduction and growth stages, when the goal is to build awareness and market share faster than customer demand alone would have grown it – not in decline, when demand itself has already turned down.

Where Is the Colorado Ricardo Bike?

Worked example

Three straight years of falling sales, with this year’s forecast under half of peak volume, is textbook decline – not a temporary dip that more advertising can fix. Advertising is a demand-building tool most effective in introduction and growth; in decline, the underlying problem is usually that the market itself has moved on (in this case, towards e-bikes and gravel bikes), so no amount of promotional spend on the ageing product recreates demand that has genuinely shifted elsewhere.

What Decline-Stage Strategy Actually Looks Like

The standard responses to decline are to harvest the product (cut costs and marketing spend, keep it available for loyal remaining customers, and let it wind down profitably), or to replace it with a new offering aimed at the same underlying need – which is exactly why Colorado Ricardo’s real strategic answer is not a bigger advertising budget for the old bike, but investment in the e-mountain-bike and gravel-bike lines discussed throughout this course.

Key point

The Product Life Cycle, popularised by Levitt (1965), is a warning against treating every sales slowdown the same way. A company that responds to genuine decline with more advertising, rather than harvesting the ageing product and investing in its replacement, usually spends money without reversing the trend.

This is the same underlying decision explored from a strategic-options angle in the Ansoff’s Matrix exercise.