Service Life Cycle :
The different stages in the life cycle of a product and services are more or less similar and have common characteristics. They are as follows:
- Introduction: At this stage the service is new as it is just launched its usage rate will be low. The production cost is high but the sales being smaller the revenue is low. Until the growth .stage the service provider mostly operate from one location.
- Growth: There is a rapid increase in the sales at this stage. The sales increase at an increasing rate as the consumers see the benefits. In using the service. Promotion is focused in order to attract new users and retain repeat customers. The firm may even improve service quality and add some new features to attract the customers.
- Maturity: The product/services enter the stage of maturity as the rate of growth slows down. Here the sales are still increasing but increasing at a decreasing rate. The sales touch their peak and then it saturates. At that level for a longer period of time. There is intense competition at this stage and the firm in order to keep its market share may modify and improve the service quality.
- Decline: The usage rate of services diminishes with the technological advancement and changing consumer tastes. The service provider uses different strategies at this stage. Some firms withdraw form the current service and switch over to new ventures with better opportunities. Some retain the services in order to cater to the needs of a few loyal customers but still diversify to other services.
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