The product life cycle is the progression of a product through 4 stages; these stages are Introduction, Growth, maturity and Decline.
The introduction stage is when the product first comes into the market, sales are at zero and profits are in the negative. This stage is about getting attention for the product, the launchpad. Through promotions and advertising (spending) you need to get a grip of the market and become a choice amongst your targeted segment.
In the Growth stage you see sales rise rapidly and your profits will peak here. This stage is critical because competitors and the market will react to you. You must continue to cement your position in the market and look for opportunities to make your product a viable choice for those outside the target segment if possible.
The peak of sales happens and starts to decline. Here we see a saturated market with many competitors. Weaker competitors are forced out and deals or promotions are run as companies see the end is near in this market and want to get rid of stock quick!
Sales are now falling rapidly, advertising has ceased and the product is essentially for clearance. Efforts can be done to reposition it this depends on the products market, such as technology. This is essentially where places like NQR and DFO step in to sell the product cheap and quickly.
Depending on the products market this life cycle could be a decade, 4 years or 3 months. Technology and vehicles are usually longer, whilst toys, food and clothes can be a lot shorter.