Certified Management Accountant Practice Exam

In the maturity phase of the product life cycle, a key characteristic is steady sales and maximum market penetration. During this phase, the product has typically gained widespread acceptance in the market, leading to a stable demand. As a result, sales growth begins to plateau and becomes much slower, as the product has reached its peak adoption among consumers. This phase often sees companies focusing on maintaining their market share through various strategies, since many competitors are also present in the market, and the differentiation between products may diminish. Maximum market penetration indicates that the product has reached a large portion of its potential customers, making further growth difficult and requiring businesses to focus on other aspects, such as customer retention, brand loyalty, or product improvements. High expenditures on marketing and rapid decline in sales are characteristics associated with other phases of the product life cycle, such as the introduction phase where significant investment is required to promote the product and the decline phase where interest and sales decrease significantly. Slow sales growth may occur during the maturity phase, but it does not capture the essence of maximum market penetration and stability that defines this stage effectively.