Product Flashcards
What are the stages of the product life cycle?
Development
Introduction
Growth
Maturity
Saturation
Decline
What happens at the development stage of product life cycle?
-product is not on the market
-research takes place
-prototypes built and modified before product is ready for launch
-no profit or sales as product is not on the market yet
What happens at the introduction stage of the product life cycle?
-product is launched on to the market
-advertising and promotion costs are high
-likely no profit because of high advertising costs
-sales begin to increase
What happens at the growth stage of product life cycle?
-customers become aware of the product
-sales rise rapidly as customers become aware
-product becomes profitable
What happens at the maturity stage of the product life cycle?
-product is fully established within the market
-sales reach their peak
-spending on advertising is much less as product is established
-high profit
what happens at the saturation stage of the product life cycle?
-sales and profit begins to decrease as product has flooded the market
-everyone has product so it is no longer in demand
What happens at the decline stage of the product life cycle?
-product is no longer fashionable
-new and more improved products are on the market
-product is no longer wanted so is eventually withdrawn
-low sales and profit
What are extension strategies to enhance products sales and profits?
-change name of product
-change the packaging
-change the price
-change the use
-new variables
What are the benefits of changing the name of a product?
-if product has suffered a bad publicity and sales are falling it gives the product a new image
-entices customers who will be curious to purchase
What are the benefits of changing the packaging of a product?
-makes the product more vibrant and colourful to ensure it stands out on shop shelve
-gives the product a new image which appeals to new market segment
What are the benefits of changing the price of a product?
-lower the price of the product makes it more accessible to customers
-may appeal to low income consumerws
What is the benefits of changing the use of the product?
-change the way the product is used so existing customers can be encouraged to buy more of the product or use it in different ways
What is the benefits of introducing new variations of product?
Can appeal to different tastes or different market segments which encourages sales
What is a product portfolio?
The range of items sold by a business
What are the advantages of a product portfolio?
-increases sales and profits as consumers can buy a variety of products a
-risk is spread
-is easier for the business to introduce new products
-encourage consumer loyalty
