Various stages of product life cycle are: 

1. Introduction Stage: During this stage the product is born. The firm informs the market about the existence and features of the product. Prices are high because of small scale of production and heavy promotional expenditure. Thus, the introduction stage is characterised by high costs, low sales volume, limited distribution and high prices. 

2. Growth Stage: In this stage the demand and sales grow rapidly, distribution is widened, competition increases and prices fall. 

3. Maturity Stage: During this stage, sales continue to grow but at a declining rate. Competition increases further and markets get stabilised. Prices are reduced due to competition but promotional expenditure remains high. As a result profits decline. 

4. Decline Stage: Sales fall down sharply and promotional expenditure has to be reduced drastically to minimise loss. 

5. Death Stage: Most firms shift their attention to other products gradually phasing out the declining product. 

Advantages of Product Life Cycle: 

1. When the product life cycle is known the firm can prepare an effective product plan. 

2. Management can take advance steps before the decline of the product. 

3. The maturity stage can be extended by finding new uses of the product. 

4. Technological innovations can be adopted to improve the quality, features and design of the product.