5

Question 2

Define Problem Child and Cash Cow (business terms)

Answer 2

Problem Child/ Question Mark - Low Market Share, High Market Growth (Introduction Stage)
Cash Cow - High Market Share, Low Market Growth (Mature Stage)(should be milked)

Question 3

What does the Boston Matrix show?

Answer 3

The market share of a firms products and the rate of growth in the markets which they operate in.

Question 4

What are the Benefits of Having a Product-Life cycle?

Answer 4

1. Helps categorise products into different stages and shows expected cash flow.
2. Helps decide whether a product should be withdrawed, introduced or prolonged.
3. Helps ensure the business has a balanced portfolio

Question 5

Disadvantages of a having a Product- Life Cycle

Answer 5

1. Time Consuming to create
2. Difficult to state where each product is and how long it will be there

Question 6

Advantages of producing a diverse product range

Answer 6

1. Risk is spread for company
2. Positive Cash Flow from one product can fund the R&D of new ones.
3. More Markets > More Customers > More Sales

Question 7

Advantages of pro-longing the life cycle of a product

Answer 7

1. Less risk involved
2. Cheaper than creating a new product

Question 9

Name some Different Extension Strategies

Answer 9

1. Product Modification
2. Change in Appearance, Format or Packaging
3. Rebranding
4. Reducing Price
5. Changing Target Market (Coca-Cola)

Question 10

Name the Product Life Cycle Stages

Answer 10

Development > Introduction > Growth > Maturity/Saturation > Decline