8. product strategy

Question 1

use of product lifecycle

Answer 1

1. Product termination
   ▪ Nothing lasts forever: new products need to be developped
2. Growth projections
   ▪ Warns against assumption of continuing growth
3. Marketing objectives and strategies over PLC
   ▪ Through various phases different marketing is needed

Question 2

limitations of product lifecycle

Answer 2

Fads and classics
▪ Fads: sales rocket first, but drop as quickly (e.g. hula hoops, Pokemon cards,
superfoods, …)
▪ Classics: Ben&Jerry’s, Haagen-Daz’s vegan ice creams
▪ Marketing effects
▪ PLC is result of marketing, not the cause
▪ Unpredictability of duration per stage
▪ Not useful as a forecasting tool; except when comparator product
▪ Misleading objective and strategy prescriptions

Question 3

Guidelines for setting strategic objectives: stars

Answer 3

Build sales and/or market
share
* Invest to maintain/increase
leadership position
* Repel competitive challenges

Question 4

Guidelines for setting strategic objectives: problem children

Answer 4

Build selectively
* Focus on defendable niche
where dominance can be
achieved
* Harvest or divest the rest

Question 5

Guidelines for setting strategic objectives: dogs

Answer 5

Harvest, or
* Divest, or
* Focus on defendable
niche

Question 6

Guidelines for setting strategic objectives: cash cows

Answer 6

Hold sales and/or market share
* Defend position
* Use excess cash to support
stars, selected problem
children and new product
development