product life cycle

Question 1

product life cycle

Answer 1

it describes the stages a product will pass through from its introduction through its growth until its mature and then finally its decline

Question 2

development

Answer 2

first a product will be developed the prototype will be tested and market research will be carried out before the product is launched into the market there no sales at this time

Question 3

introduction

Answer 3

the product is then launched to the market sales will grow slowly at first, informative advertising is used until the product becomes known, the method of pricing used would be price skimming

Question 4

growth

Answer 4

sales start to grow rapidly the advertising is changed to persuasive advertising to encourage brand loyalty. prices are reduced as new competitors come to the market and profits start to be made as the development costs are covered

Question 5

maturity

Answer 5

sales now increase slowly competition becomes intense and pricing strategies change to promotional and competitive pricing a lot of advertising is used to maintain sales growth and profits are at their highest

Question 6

saturation

Answer 6

sales stabilize at their highest points competition is high but but their no new competitors competitive pricing is used. Profits start to fall as sales are static and prices have to be reduced to be competitive

Question 7

decline

Answer 7

sales of products decline as new products come along or because the product has lost appeal the product will be withdrawn from the market when sales become so low and when prices have been reduced so low that it becomes unprofitable to produce the product advertising is reduced then stopped

Question 8

importance

Answer 8

knowing the product life cycle that a product is in can help businesses with pricing and promotion decisions

Question 9

Extending the product life cycle

Answer 9

when a product reaches the maturity or saturation stage of its product life cycle a business may stop sales starting to fall by adopting extension strategies

Question 10

ways of extending

Answer 10

introduce a new and improved product
sell into new markets e.g. export the product to another country
make small changes to the products design color or packaging
use a new advertising campaign
introduce new variations of the original product