Product Life Cycle

Question 1

What is the Product-Life-Cycle ?

Answer 1

It represents the different stages in the life of a product and the sales that are achieved at each stage.

Question 2

What are the 5 stages of a Product-Life-Cycle ?

Answer 2

• Introduction
• Growth
• Maturity
• Saturation
• Decline

Question 3

What occurs during the Introduction stage of a products life cycle?

Answer 3

• Likely that little consumers will be aware of the products existance
• Price can be high, and sales may be restricted to early adopters
• Profit may be limited, as development costs will need to be repaid due to early expenditure

Question 4

What occurs during the Growth stage of a products life ?

Answer 4

• The product will become more widely known and consumed
• Advertising will begin to strengthen the brand and develop an image for the product
• Profits may start to be earned, however advertising costs will keep revenue low

Question 5

What occurs during the Maturity stage of a product life ?

Answer 5

• The product range may be extended, as competition needs to be responded to
• Advertising should be used to firm-up the products image in consumers minds
• Sales are at their peak, and profits should be at an all time high

Question 6

What occurs during the Saturation stage of a products life ?

Answer 6

• Very few new customers are gained, replacement products are the trend
• Businesses should try to reduce their costs, so that prices can be more flexible
• The battle to survive is beginning, and the market for the product is “full”. Profits may decline.

Question 7

What occurs during the Decline stage of a products life ?

Answer 7

• Sales may start to fall quickly, and the product range may be reduced to focus on core products
• Advertising costs will be reduced, with attempts made to mop-up what is left of the potential market
• Overall profits will likely fall, as well as the products price