What stage in the Product Life Cycle is characterized by high product development costs?

The stage in the Product Life Cycle that is characterized by high product development costs is the Introduction stage. During this phase, a product is newly launched into the market after extensive research and development. The company incurs significant expenses related to product design, testing, marketing campaigns, and establishing distribution channels.

These costs are high because the company needs to create awareness and interest in the product, as well as to cover expenses associated with manufacturing the product at the outset, which often involves a learning curve and initial low production volumes. Additionally, the lack of established sales often results in lower revenue to offset these costs, amplifying the financial impact during this stage.

As the product moves into the Growth stage, sales typically begin to increase, allowing companies to benefit from economies of scale, and the costs associated with product development become less significant relative to revenue. Therefore, the Introduction stage is distinctly marked by its high costs associated with bringing a new product to market.