product life cycle Flashcards
what is the product life cycle
a theoretical model which predicts the stages a product goes through in its life
how can a business use a product life cycle
investment into products
forecast sales trends
market targeting
managing a product portfolio
what are the 5 stages
development introduction growth maturity decline
when is there a steep increase in sales
growth
when do sales stop growing
maturity
when do sales fall
decline
what are sales in the development section
0
what is the strategy in introduction stage
encourage customer adoption
high promotional spending
penetration or skimming prices
what is penetration pricing
low
what is skimming
high prices for high porfits
when do you begin to see economies of scale decrease unit costs/ better csh flow and profits
growth
what is the strategy in growth
promote brand awareness
market penetration
improve the product- different styles
wider target customer base
what happens in maturity
weaker competitors leave the market
prices fall
best cash flow and profits
what is strategy in maturity
focus on differentiation
extension strategys- new uses for same product
example of extension strategy
lucozade
