AS2 TP4

Question 1

what are the 5 stages in product life cycle

Answer 1

intro, growth, maturity, saturation and decline

Question 2

what is product modification (extension strategy)

Answer 2

firms modify product in some way in order to make them appear different or superior to original

Question 3

describe finding a new use for product as an extension strategy

Answer 3

firm able to convince consumers that their product can be used in a no. ways allowing firm to extend maturity stage

Question 4

describe repositioning as an extension strategy

Answer 4

to prevent the onset of decline phase, firms attempt to reposition their products by changing the image of the product in order to alter consumers perception of product

Question 5

describe repackaging as a extension strategy

Answer 5

introduction of new labels, colour schemes or containers have proven to be successful in extension of product life cycle

Question 6

describe reducing the price as extension strategy

Answer 6

a price reduction can be effective in extending all the stages of the life cycle as its likely to attract additional customers

Question 7

what is a product portfolio

Answer 7

by organising product launches at regular intervals there is never a gap in the market and when one product is declining another is growing, helping to ensure there is a steady revenue coming into the firms and keeping business in customers minds

Question 8

advantages of having a balanced portfolio

Answer 8

less promotional expenditure needed

gives security to firm

helps build strong corporate image

Question 9

advantages of product life cycle

Answer 9

allows business to make more effective decisions regarding introduction of new products and removals

enables business to maintain a balance of products at each stage

enables managers to plan ahead and consider timing/type of extension Strategy needed

Question 10

disadvantages of product life cycle

Answer 10

based on historical data so doesn’t provide accurate measurement of future market

managers may make incorrect decisions regarding product introduction/withdrawal due to factors beyond control e.g changes in consumer taste

difficult to estimate the products current stage of the life cycle since demand may be subject to seasonal variations