Marketing Strategy (Chapter 13) Flashcards
What is the definition of the Product Life Cycle?
Refers to the length of time a product is introduced to consumers into the market until it’s removed from the shelves.
What are the 4 stages of the Product Life Cycle?
Introduction, Growth, Maturity, Decline
Why is the concept of the Product Life Cycle used?
The concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.
What is the definition of the Introduction stage?
Generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits.
What are some Characteristics of the Introduction stage?
- Low sales
- High cost per customer
- Financial losses
- Innovative customers
- Few competitors
What is the definition of the Growth stage?
When the product gains success, it moves onto the growth stage. This is characterised by growing demand, an increase in production and expansion in its availability.
What are some Characteristics of the Growth stage?
- Increasing sales
- Cost per customer falls
- Profits rise
- Increasing number of customers
- More competitors
What is the definition of the Maturity stage?
The maturity stage is the most profitable stage whilst the costs of production and marketing start to decline.
What are some Characteristics of the Maturity stage?
- Peak sales
- Cost per customer lowest
- Profits high
- Mass market
- Stable number of competitors
What is the definition of the Decline stage?
The product takes on increased competition as other companies emulate its success - sometimes with enhancements or lower prices. The product may lose market share and begin its decline.
What are some Characteristics of the Decline stage?
- Falling sales
- Cost per customer low
- Profits fall
- Customer base contracts
- Number of competitors fall
What is the definition of Extension Strategies?
A way of extending the life cycle of a product that consists of finding ways to keep people interested in the product for longer, thereby increasing the number of sales. Extension strategies are usually introduced during the maturity/saturation stage of the life cycle, before a real decline takes place.
What are 5 examples of Extension Strategies?
- Repositioning the product
- Increasing marketing activity
- Product differentiation
- Reducing the price of the product
- Rebranding the product
