The Product Life Cycle

Question 1

What are the six stages of the product life cycle?

Answer 1

1. Development
2. Introduction
3. Growth
4. Maturity
5. Saturation
6. Decline

Question 2

What is happening during the development stage?

Answer 2

Product is still being designed and developed
No sales

Question 3

What is happening during the introduction stage?

Answer 3

Product has just been launched
The product might be unknown
Sales will be low which means profits will be negative

Question 4

What is happening during the growth stage?

Answer 4

More interest in the product
Sales increase rapidly
At the end of this stage, profits will reach their highest point

Question 5

What is happening during the maturity stage?

Answer 5

Sales reach their highest point
The rate of growth will start to slow down
Competitors will start to enter the market, driving sales down

Question 6

What is happening during the saturation stage?

Answer 6

Similar products will enter the market
Businesses will have to lower their prices to stand out
Some businesses are forced out of the market
Sales will start to fall

Question 7

What is happening during the decline stage?

Answer 7

The product is being replaced by newer, better products
Sales and profits will fall

Question 8

What are the two choices businesses can take when they hit the decline stage?

Answer 8

Replace the product with a new one
Brand extension

Question 9

Define the term ‘brand extension’.

Answer 9

Prolonging the life of the existing product

Question 10

What are the different strategies for brand extension?

Answer 10

Find new uses for the product
Finding new markets
Develop of wider product range
Aiming the product towards a specific target market
Changing appearance or packaging