Product Life Cycle

Question 1

What is the Product Life Cycle (PLC)?

Answer 1

A framework describing the stages a product goes through from introduction to decline.

Question 2

What are the four stages of the PLC?

Answer 2

Introduction, Growth, Maturity, and Decline.

The PLC can be observed in products like the iPod, which has gone through all stages.

Question 3

What is the primary goal during the introduction stage?

Answer 3

To build awareness and stimulate demand.

Question 4

What are the characteristics of the introduction stage?

Answer 4

High costs, low sales, and heavy promotion efforts.

Tesla’s Roadster in 2008 marked the introduction of Tesla’s electric vehicles.

Question 5

What pricing strategy is common during the introduction stage?

Answer 5

Price skimming or penetration pricing to attract early adopters.

Question 6

Why is investment in marketing crucial during this stage?

Answer 6

To educate the market and overcome consumer resistance.

When Netflix launched streaming, it invested heavily in advertising and free trials.

Question 7

What is the primary goal during the growth stage?

Answer 7

To maximize market share and establish a strong brand presence.

Question 8

What characterizes the growth stage?

Answer 8

Rapid sales growth, economies of scale, and increased competition.

Smartphones experienced explosive growth during the late 2000s, with Samsung and Apple leading.

Question 9

What happens to production costs during the growth stage?

Answer 9

Costs per unit decline due to higher sales volumes and efficiencies.

Question 10

What is a major risk during the growth stage?

Answer 10

New competitors entering the market, driving prices down.

The plant-based meat industry is in its growth phase, with brands like Beyond Meat and Impossible Foods.

Question 11

What is the primary focus during the maturity stage?

Answer 11

To defend market share and maximize profitability.

Question 12

What happens to sales growth during the maturity stage?

Answer 12

Sales growth slows, and the market becomes saturated.

Coca-Cola operates in the maturity stage, focusing on defending its global market share.

Question 13

How do companies differentiate during maturity?

Answer 13

By improving product features or adding services.

Question 14

Why are promotional efforts often increased in the maturity stage?

Answer 14

To maintain interest and loyalty among consumers.

McDonald’s regularly updates its menu to retain customer interest in a mature market.

Question 15

What is the primary goal during the decline stage?

Answer 15

To minimize losses and make decisions about discontinuing or rejuvenating the product.

Question 16

What characterizes the decline stage?

Answer 16

Falling sales, reduced profit margins, and market contraction.

DVD players entered decline as streaming services like Netflix and Disney+ grew.

Question 17

What strategies can companies adopt in the decline stage?

Answer 17

Harvesting (reducing investments) or divesting (discontinuing the product).

Question 18

How can a product be rejuvenated during decline?

Answer 18

By targeting a niche market or innovating its features.

Polaroid cameras were revitalized by marketing them as retro devices for younger audiences.

Question 19

Why does the PLC guide marketing strategies?

Answer 19

It helps allocate resources effectively based on the product’s stage.

Question 20

How does the PLC influence pricing decisions?

Answer 20

Pricing strategies vary, such as skimming in introduction and discounts in maturity.

Apple reduces iPhone prices as models age, targeting price-sensitive buyers.

Question 21

How does advertising evolve throughout the PLC?

Answer 21

Heavy advertising during introduction, brand reinforcement during growth, and cost-cutting in decline.

Question 22

How does the PLC affect distribution strategies?

Answer 22

Limited distribution during introduction, expanded networks in growth, and scaled-back efforts in decline.

Spotify expanded rapidly in its growth phase by partnering with telecom providers globally.

Question 23

What stage of the PLC are electric vehicles currently in?

Answer 23

Growth stage, as demand and competition increase globally.

Tesla leads in the growth stage of EVs, while legacy automakers like Ford are entering the phase.

Question 24

What stage of the PLC are desktop computers in?

Answer 24

Decline stage, due to the rise of laptops and mobile devices.

Dell focuses on business solutions to sustain profitability in a declining market.

Question 25

How did Coca-Cola manage its maturity stage?

Answer 25

By diversifying its portfolio into diet drinks, juices, and bottled water.

Question 26

What stage of the PLC are fitness trackers in?

Answer 26

Maturity, with brands like Fitbit and Garmin focusing on differentiation through advanced features.

Question 27

Can the PLC stages overlap?

Answer 27

Yes, products may experience features of multiple stages simultaneously.

Question 28

Why is the PLC criticized for being too rigid?

Answer 28

It assumes all products follow a predictable path, which isn’t always the case.

Fidget spinners skipped directly from introduction to decline.

Question 29

How can a company extend the PLC?

Answer 29

By introducing upgrades, rebranding, or targeting new markets.

Question 30

What is an example of a product extension?

Answer 30

Microsoft extended the life of Windows through updates and new versions.