Podcast
Questions and Answers
In the decline phase of a product's life cycle, which strategy focuses on making drastic changes to revive the product?
In the decline phase of a product's life cycle, which strategy focuses on making drastic changes to revive the product?
Which strategy is NOT typically recommended during the maturity phase to maintain interest in a product?
Which strategy is NOT typically recommended during the maturity phase to maintain interest in a product?
What is the main focus of the growth phase in a product life cycle?
What is the main focus of the growth phase in a product life cycle?
How does the growth-share matrix categorize 'Cash Cows'?
How does the growth-share matrix categorize 'Cash Cows'?
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Which of the following is a strategy to extend the product life cycle during the maturity phase?
Which of the following is a strategy to extend the product life cycle during the maturity phase?
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What does product diversification involve?
What does product diversification involve?
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Which strategy is focused on maintaining current operations while gradually removing a product from the market in the decline phase?
Which strategy is focused on maintaining current operations while gradually removing a product from the market in the decline phase?
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What does the strategy of product specialization focus on?
What does the strategy of product specialization focus on?
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What is a significant benefit of continual development of new products in a competitive market?
What is a significant benefit of continual development of new products in a competitive market?
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Which step in the new product development process involves refining ideas into detailed concepts?
Which step in the new product development process involves refining ideas into detailed concepts?
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During which phase of the Product Life Cycle do sales peak and profit margins begin to tighten?
During which phase of the Product Life Cycle do sales peak and profit margins begin to tighten?
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What is a risk associated with developing new products?
What is a risk associated with developing new products?
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Which pricing strategy might a company use during the introduction phase of a product?
Which pricing strategy might a company use during the introduction phase of a product?
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What does the New Product Matrix help businesses identify?
What does the New Product Matrix help businesses identify?
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What characterizes the decline phase of the Product Life Cycle?
What characterizes the decline phase of the Product Life Cycle?
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What should a business focus on during the introduction phase of a product?
What should a business focus on during the introduction phase of a product?
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Study Notes
Importance of Continual Development of New Products
- Essential for staying relevant in a competitive market where consumer preferences shift continuously.
- New product development drives growth by bringing in new customers and retaining existing ones.
- Involves risks such as high costs and uncertainty; requires a structured approach to mitigate these challenges.
New Product Matrix and Development Process
- The New Product Matrix identifies opportunities by linking products to market needs.
- Steps in the New Product Development Process include:
- Idea Generation from both internal and external sources.
- Screening to remove infeasible or unprofitable ideas.
- Concept Development and Testing, refining ideas into detailed concepts.
- Business Analysis for potential sales, profits, and costs estimation.
- Product Development involving prototype creation.
- Market Testing to gauge consumer responses in a small market segment.
- Commercialization, the full launch into the market.
Product Life Cycle (PLC)
- Key phases of the PLC include:
- Introduction: High costs and low sales; focus on product awareness.
- Growth: Rapid sales and profit increases; entry of competitors.
- Maturity: Sales peak; market saturation and tighter profit margins.
- Decline: Falling sales and profits; potential product obsolescence.
Product Strategies Across the Life Cycle
- Introduction: Build awareness, utilize skimming or penetration pricing, and invest in marketing.
- Growth: Enhance product features, expand distribution, and emphasize brand differentiation.
- Maturity: Modify product offerings, explore new markets, and retain customers.
- Decline: Decide to revitalize, harvest, or divest the product; consider cost-cutting measures.
Extending the Product Life Cycle
- Maturity Phase Strategies:
- Enter new markets and encourage higher usage rates among current customers.
- Promote alternative uses or modifications to refresh interest.
- Decline Phase Strategies:
- Maintain current strategy while reducing costs and focusing on profitable segments.
- Consider significant product improvements or rebranding.
Product Mix Strategies
- Product Diversification: Introduce new products to mitigate risk and seize opportunities.
- Product Specialization: Concentrate on a specific niche or market to strengthen market position.
- Product Simplification: Streamline product offerings to focus on the most profitable items.
- Product Obsolescence: Phase out products that no longer serve market needs.
Growth-Share Matrix
- A strategic tool categorizing business units/products based on market growth and share:
- Stars: High growth and share; require investment to sustain position.
- Cash Cows: Low growth but high share; provide funds for other units.
- Question Marks: High growth, low share; strategic decision needed on investment or divestment.
- Dogs: Low growth and share; consider divesting.
Practical Applications and Group Work
- Incorporate theoretical knowledge through practical exercises and group activities.
- Engage in Power Break Activities to reinforce learning and application of concepts.
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Description
Explore the essential steps and importance of new product development in today's competitive market. This quiz covers the New Product Matrix and the structured processes necessary for successful product launches. Test your understanding of the risks and strategies involved in developing innovative products.
