Lecture 10- Managing Products

Question 1

What happens in the introduction stage?

Answer 1

• stimulate trial
• create primary demand for product class
• create selective demand for specific demand
• skimming strategy with high initial price
• penetration pricing with low price

Question 2

What happens in the growth stage?

Answer 2

• rapid sales and growth
• profits peak
• advertising for selective demand
• broaden distribution
• more competitors enter
• repeat purchases
• add new features

Question 3

What happens in the maturity stage?

Answer 3

• industry sales and product sales slow
• fewer new buyers (most are repeat customers)
• profit declines due to competition for buyers
• marginal competitors leave the market

Question 4

What happens during the decline stage?

Answer 4

• industry sales and product sales drop
• price decreases
• environmental changes cause disruption
• products dropped from product line
• retain product, but reduce marketing costs

Question 5

What are some barriers to the product lifecycle?

Answer 5

• usage barriers –> product not compatible with habits
• value barriers –> no incentive to change
• risk barriers –> physical, economic, social
• psychological barriers –> culture differences or image