PRODUCT LIFE CYCLE

Question 1

What is product portfolio analysis

Answer 1

It’s a way to carefully look at and judge all the products a company sells

Question 2

What is product life cycle

Answer 2

The different stages a product goes through in terms of sales volume from its development through to its withdrawal.

Question 3

What is stage 1: Product development

Answer 3

Characterised by:

Testing, modelling, experimenting
High levels of market research
High levels of investment leading to negative cash flow

At this point you’re not too concerned about marketing

Question 4

What’s an Appropriate marketing strategy:

Answer 4

Press releases

Question 5

What is stage 2: Introduction (WHEN THE PRODUCT IS RELEASE FOR SALE)

Answer 5

Need to raise awareness

Low sales and high promotional costs

Appropriate marketing strategy:

Informative advertising

Pricing strategy

Question 6

What does stage 3 (growth) include

Answer 6

Increasing brand awareness

Rapid increase in sales

Falling costs as output and capacity increases

Appropriate marketing strategy:

Raise awareness
Removal of introductory pricing
Increase distribution channels (The product will be available to purchase in more places)

Question 7

What does stage 4 (maturing) include

Answer 7

Characterised by:

High brand awareness
Peak and normalisation of sales
High values of sales revenue

Appropriate marketing strategy:

Reduce advertising/ reminder adverts
Use revenues to support development of new products
Consideration of extension strategies

Question 8

What does stage 5 (decline) include

Answer 8

Characterised by:

Falling sales
Products being replaced by newer versions

Appropriate marketing strategies:

Cut prices
Reduce marketing
Extension strategies