Revel flashcards 6.5 What is the product life cycle?

Question 1

Product lifecycle graph:

Answer 1

Y-axis = Sales and profits
X-axis = Time

Stages:
- Prelaunch/ r and D
Introduction
- Growth
- Maturity
- Decline.

Question 2

The introduction stage 1 :

Answer 2

• Main priority at this stage is to generate widespread awareness of the product among the target segment.
• If product is truly innovative there may be difficulties with developing primary demand.
• Also a need to gain distribution.
• Heavy demands on marketing resources.

Question 3

Growth Stage 2:

Answer 3

• Where there is a rapid increase in sales.
• Urgency at this stage to build up brand loyalty as possible.

Question 4

Maturity stage 3:

Answer 4

• Product achieves as much as it is going to and the repeat loyal customers should have emerged.
• Smaller more poorly positioned brands at this stage will be pushed out.

Question 5

Decline Stage 4:

Answer 5

• Often can be environment related rather than down to poor management decisions.
• Either milk the product, extension strategies or remove the product from the market.

Question 6

Facets of the product life cycle:

Answer 6

• Length
  , the length of the PLC varies from market to market and from brand to brand. Length of the PLC is affected by so many things such as the external environment and the firms handling of the product through it’s life.
• Self-Fulfilling prophecy: there is a danger that a product can become a self fulfilling prophecy.

Question 7

Shape of the PLC:

Answer 7

• Necessarily is a generalisation, as firms will spend different amounts of time in different stages.

Question 8

5 possible market circumstances which could distort the hypothetical curve:

Answer 8

1) Innovative product.
2) Imitative products
3) Fashion product
4) Product failure
5) Revitalisation product

Question 9

Other product marketing strategies which should be taken into account as well as the PLC:

Answer 9

The diffusion of innovation allows the grouping or classification of customers into one of 5 adopters categories depending on their speed of adoption.

• Innovators: important in getting the product off the ground and willing to take risks in being the first buyers to potentially benefit from the product.
• Early adopters: follow the lead of the innovators and once they enter the market the growth of the PLC really begins.
• Early majority: mass market starts to build up, more risk averse.
• Late majority: need reassurance of the product’s benefits, as they are at the stage where they can consider alternative products.
• Late adopters or laggards: averse to change, or just slow in hearing about the products so usually an older demographic