The product life cycle illustrates that most products will become
obsolete and have to be replaced
• If a product is no longer profitable, it is important to terminate it rather
than continue to pour time and resources into reviving it
• If the analysis indicates that the product should be deleted, there are
three choices: phase-out, run-out, or drop it immediately
• Phase-out
• The ideal method; it enables a product to be removed in an orderly fashion
• Run-out
• Used when sales for an item are low and costs exceed revenues drop
• This option is usually chosen when the product may cause harm or
complaints
• Drop it
• It is best to drop the item rather than continuing to create unhappy customer