Product Life Cycle - Unit 3 Flashcards
Name the 4/5 stages of the product life cycle:
- Introduction
- Growth
- Maturity
- Decline
• Extension
What happens at the introduction of the product life cycle?
Product is launched/released onto the market.
What happens at the growth of the product life cycle?
If the launch is successful sales increase sharply and the product may take a profit for the first time.
What happens at the maturity of the product life cycle?
Sales growth slows down but repeat customers and loyal customers continue to buy. The market becomes saturated as rivals being out competing products.
What happens at the decline of the product life cycle?
Eventually the product is outdated and there is a big fall in sales, leading to withdrawal.
What are extension strategies?
Involves slightly changing the product so that it has a fresh appeal to the target market or appeals to a new market segment.
What is a product portfolio/mix analysis?
When businesses sell a range of products. E.g Apple sell iPhone, iPad, iMac
What is cash flow?
The movement of money into and out of a business. It changes over the life cycle of a product. You have to earn more than you spend for your cash flow to be successful.
What is the Boston Matrix?
A product portfolio analysis tool used to plan the development of products.
What is a star product (Boston matrix)?
A very successful product, but growth has to be funded to keep up with the demand and cash flow may be a problem
What is a cash cow product (Boston matrix)?
Little growth, but an established and profitable product that can support others
What is a question mark product (Boston matrix)?
Presents a problem - should the business invest to increase sales?
What is a dog product (Boston matrix)?
Few prospects, but should the business continue to sell it if it is profitable and it funds other products?
What is a product portfolio analysis?
Allows a business to investigate the combination of products that it sells. It helps them make decisions like when to launch products or remove products.
What is market growth?
Market getting bigger
