As a rule, every product passes seven stages, which are development, market penetration, market development, market equilibrium, market reduction, the final rise and the fall.  The first stage is probably the most important because the overall success of the product greatly depends upon it.

The penetration stage lasts until the product establishes itself and becomes recognized by a certain market segment.  If the advertising campaign at this stage is efficient, the product yields a significant profit.

Advertisement at the stage of market development is useful but not obligatory.  Customers know the product well and purchase it actively.  The use of public relations methods is very appropriate at this point.  While market development takes place, the sales increase essentially.  The duration of market development period depends on how quickly the market gets saturated with the product.

No matter how successfully the product is distributed, the moment comes when the market is fed up with it. It means that the market has reached its equilibrium and the volume of sales has reached its peak.  Advertising at this stage is ineffective and does not change demand patterns much.

The next stage is market reduction, and then an insignificant market expansion takes place.  The reason for it is that manufacturers ramp up their marketing efforts trying to get more sales.  Advertising at this stage provides some business growth.

This period is followed with a decline when the product is purchased infrequently.  The rise gives way to the decrease.  All product leftovers are being sold, and advertising at this stage is not considered very effective.

Therefore, before starting an advertising campaign it is necessary to determine the current stage of the life cycle the product is at.  The methods of techniques of advertising largely depend on it.