PLC

Question 1

The product life cycle (PLC) refers to

Answer 1

the course of product’s profits and sales over time.

Question 2

PLC is divided into five stages:

Answer 2

1. product development
2. introduction
3. growth
4. maturity
5. decline.

Question 3

Product development is

Answer 3

the development of the original product, new, brand idea or service, as well as any product modification or improvement.

Question 4

Product developement is the stage where the company

Answer 4

finds and develops a new product idea. At this stage investment and R&D costs mount, while sales and thus profits are zero.

Question 5

To obtain new ideas, a company can either

Answer 5

choose acquisition or new products

Question 6

Seasons for failure include:

Answer 6

overestimation of market size
costs
competition
design problems

Question 7

The stages in product development are:

Answer 7

1. idea generation
2. screening
3. product development & testing
4. marketing strategy development.
5. business analysis
6. test marketing
7. commercialization

Question 8

Introduction is

Answer 8

the stage where the product is first commercialized to the market.

There are slow sales growth as a product is introduced into the market, where profits as zero or negative, due to the heavy expenses (from either development or marketing).

Question 9

Growth is

Answer 9

the point where there is rapid acceptance from the market and profits and sales are increasing.

Question 10

Maturity is

Answer 10

the stage of slowdown in sales growth as product acceptance is achieved.

At this point, profits level-off or even fall and marketing increases to try to offset this fall in profits

Question 11

Decline is

Answer 11

the final PLC stage, where sales fall off and profits drop eventually reaching zero or even becoming negative.