If the product has mass market appeal, this is when the bulk of potential customers will buy. Competition increases, and profit margins tend to fall. Shown by the dotted line on the chart. The product starts to 'show its age'. New and better competitive products emerge in the market.
Sales fall and profits dip sharply.
Inevitably, however, the life of the product is at an end. And unless new products are introduced by a business, the life of the business is also at an end. If your business has a number of products, it is likely that they will each be at different stages of the product life cycle. If you are to avoid a decline in overall sales and profits, the timing of introduction of new products is crucial. If you are simply to maintain a plateau in sales, the pattern of new product introduction will look something like the chart below.