During which phase of the product life cycle can a company expect to have high promotional costs but no revenue?

In the product life cycle, the introduction phase is characterized by a focus on building awareness and interest in a new product. During this stage, companies typically incur high promotional costs as they aim to educate potential customers about the product and encourage initial trial. These costs may include advertising, public relations, and marketing campaigns designed to promote the product, as well as any expenses associated with distribution and market entry.

At this point, revenues are usually minimal or nonexistent, as the product is new to the market and has yet to gain traction or a solid customer base. This contrasts with later phases of the product life cycle, such as growth, where marketing efforts tend to shift toward driving sales, and therefore, revenue often begins to climb. In the maturity phase, companies may reduce promotional spending as the product is well-established, while in the decline phase, marketing strategies may pivot to minimize costs or phase out the product entirely.

Thus, the introduction phase is distinct in its combination of high promotional costs combined with low or no revenue, making it a unique and critical time for businesses aiming to establish their product in the marketplace.