Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which stage of the product life cycle typically experiences peak sales?

1. Introduction

2. Growth

3. Maturity

4. Decline

The correct answer is: Maturity

The stage of the product life cycle that typically experiences peak sales is the maturity stage. At this point, the product has been in the market long enough for the company to have optimized its marketing strategy and expanded production capacity. During maturity, sales reach their highest volume because the product is well-established, consumer awareness is high, and the market demand is stable. This period is characterized by intense competition, as many companies may offer similar products. Companies often focus on differentiating their products to maintain their market share. Additionally, heavy promotion and possibly price adjustments may be undertaken to attract customers and reinforce brand loyalty. In contrast, during the introduction stage, the product is new to the market, and sales growth is slow as consumers must learn about it. The growth stage, while experiencing increasing sales, has not yet reached its peak. The decline stage sees a reduction in sales as the product loses consumer interest, faces competition from newer offerings, or may become outdated. Thus, the maturity stage is uniquely positioned as the time when product sales are at their highest.