product life cycle

Question 1

What is stage 1 of a product life cycle?

Answer 1

research and development

Question 2

What is stage 2 of a product life cycle?

Answer 2

introduction

Question 3

What is stage 3 of a product life cycle?

Answer 3

growth

Question 4

What is stage 4 of a product life cycle?

Answer 4

maturity

Question 5

What is stage 5 of a product life cycle?

Answer 5

decline

Question 6

Describe the research and development stage?

Answer 6

During the Research and development stage the 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 7

Describe the introduction stage?

Answer 7

During the Introduction stage the product is launched into the market:​

• A company will seek to build product awareness and develop a market for the product. ​
• Advertising costs will be high in order for the product to get noticed

Question 8

Describe the growth stage?

Answer 8

During the Growth stage the company seeks to build brand preference and increase market share:​

• sales begin to rise​
• advertising costs are still high​
• a profit may be made, if all Research and Development (R&D) and advertising costs have been recouped.

Question 9

Describe the maturity stage?

Answer 9

During the maturity stage the product sales are at it’s peak and are beginning to fall:​
-advertising can be reduced as product is now well known​
-Strong growth in sales diminishes​
​-Competition may appear with similar products ​
​-Need to defend market share while maximising profit

Question 10

Describe the decline stage?

Answer 10

• During the Decline stage the product sales begin to fall rapidly. ​
• Sales are dropping off sharply due to the end of the product life.​
• Demand has reduced significantly​
• Profit remains as no investment costs ​
• Company may wish to rejuvenate the product by adding new features and finding new uses.

Question 11

How can you delay the decline and maximise profits?

Answer 11

​

Reduce price of the product ​
-Different advertising or sales promotion techniques can prolong the life of the product, giving it a new image (e.g. celebrity endorsements)​
-New and improved versions of the product can be released (e.g. version 2.0 and then version 3.0.)​
​-Special editions/additional features could be added​
​-Rebranding (e.g the style of the packaging may be changed to give the appearance of a new and improved product.)