product

Question 1

what are the five stages of the product life cycle?

Answer 1

• development
• introduction
• growth
• maturity
• decline

Question 2

what are the features of development?

Answer 2

• product is not on the market yet
• research and development and testing take place
• prototypes are built and modified before a product is ready for launch
• no sales are made
• development costs will need to be recovered later

Question 3

what are the features of introduction?

Answer 3

• product is launched on the market
• advertising costs will be high in order for the product to get noticed

Question 4

what are the features of growth?

Answer 4

• sales begin to rise advertising costs are still high
• a profit may be made if all research and development and advertising costs have been recouped

Question 5

what are the features of maturity?

Answer 5

• sales are at their peak and profits are maximised
• advertising can be reduced as product is now well known

Question 6

what are the featues of decline?

Answer 6

sales begin to fall, sometimes as a result of new competitors, new products, changes in fashion or lifestyle

Question 7

what are the six ways of extending a products life cycle?

Answer 7

• change the product in some way
• change the price, usually reducing it
• change the place it is sold – find new markets for the product
• change the way it is advertised or promoted
• change the packaging
• change the name

Question 8

what are the advantages of a product portfolio?

Answer 8

• spreads the risk - if one product fails there are others to rely on – meaning that there is less chance of business failure
• maximises sales because the business is covering different market segments, so profits are higher
• can raise the profile of the business because it has a wider range of products
• consumers see a variety of products with the same brand, so brand recognition is high
• easier to launch new products due to greater brand awareness

Question 9

what are the disadvantages of having a product portfolio?

Answer 9

• higher research and development costs for multiple products
• higher marketing and advertising costs to cover multiple products
• bad publicity incurred by one product may affect sales of all products
• resources may be spread too thin, so no single product can become a market leader

Question 10

what are the four segments of the boston matrix?

Answer 10

• stars
• cash cows
• question marks
• dogs

Question 11

what is a star?

Answer 11

products that have a high market share in a fast growing market

Question 12

what is a cash cow?

Answer 12

products that have a high market share in a slow growing market

Question 13

what is a question mark?

Answer 13

products that have a low market share in fast growing markets

Question 14

what is a dog?

Answer 14

products with a low market share in slow growing markets