3.4d - Product Life Cycle Flashcards
Product life cycle definition
The different stages that a product goes through
What can cause the product life cycle to be short?
- Fast rate of technological change
- High degree of innovation
- Customer’s tastes are changing quickly
- It is badly marketed
- It is a fashion item
How can the product life cycle be used?
- Forecast future sales
- Assist marketing strategies
- Identify deviations from the norm
- Aid analysis of product portfolio
What are the different stages of the product life cycle?
- Development
- Introduction
- Growth
- Maturity
- Decline
What happens in the development stage of the product life cycle?
- Research
- Test marketing
Is a profit or a loss made in the introduction stage of the product life cycle?
Possible losses due to heavy promotional spending
What happens in the growth stage of the product life cycle?
- Sales start to rise but there is still high promotional spending
- Competitors are attracted
- Product is improved
What happens in the maturity stage of the product life cycle?
- Customer loyalty is established
- Promotional spending may fall but more competition may appear
What are the different extension strategies that can be used?
- New market segment
- Modify product
- Change product image
- New geographical market
- Change promotion
- Change price
Balanced portfolio definition
A portfolio in which there is a variety of products at different stages in the product life cycle
Disadvantages of the product life cycle:
- The shape and duration of the cycle varies
- It is difficult to recognise exactly where a product is in the life cycle
