ch 8

Question 1

What do new market offerings provide

Answer 1

VALUE to both firms and customers

Question 2

Pioneers vs First Movers

Answer 2

Pioneers: New product intros that radically change both the rules of competition and consumer preferences (BREAKTHROUGHS)

First Movers: Pioneers that create a brand new market or product category

Question 3

PLC

Answer 3

Product Life Cycle
Course of a product’s sales and profits over its lifetime

Question 4

Stages of PLC (5)

Answer 4

1. Development
2. Introduction
3. Growth
4. Maturity
5. Decline

Question 5

PLC Style, Fashion, Fad

Answer 5

Style: Once invented, may last for generations, several periods of renewed interest

Fashion: Grow slowly, become popular for a while, die out slowly

Fads: Temporary periods of high sales

Question 6

PLC - Development

Answer 6

Finds and develops news product idea
- Sales = 0
- Investment costs = HIGH

Question 7

PLC - Introduction

Answer 7

New product is made available for purchase
- Profit = 0

Question 8

PLC - Growth

Answer 8

Sales are increasing quickly
- Profits = increasing

Question 9

PLC - Maturity

Answer 9

Sales slow or level off
- Achieved acceptance by buyers
- Profits = decline

Question 10

PLC - Decline

Answer 10

Sales drop
Profits drop

Question 11

What can help extend a product’s life cycle?

Answer 11

• develop new uses
• modify/improve product
• increase # of users
• reposition product
• change marketing strategy