Product Life Cycle Management

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Questions and Answers

From the customer's point of view, what is the impact of a price reduction on a product?

The customer is indifferent to it.

The customer is unaware of it.

The customer may put a high value on it.

The customer may not put a high value on it. (correct)

How can a company enhance the value proposition of its product?

By increasing the price of the product.

By reducing the price of the product.

By providing additional features that the customer values. (correct)

By decreasing the quality of the product.

What is the strategy behind gradually releasing enhanced features of a product?

To overwhelm the customer with options.

To keep the customer engaged with innovations. (correct)

To maintain the bottom line by controlling costs.

To copy the competitor's strategy.

What is the goal of launching consumer schemes?

To create a perception of value without reducing prices. Signup and view all the answers

What is the benefit of launching consumer schemes for a company?

It provides a small incremental cost for a perceived higher value. Signup and view all the answers

What can a company do to stay ahead of competition?

Launch consumer schemes that provide a perceived value. Signup and view all the answers

What is the advantage of providing additional features to a product?

It allows the customer to value the product higher. Signup and view all the answers

What is the strategy behind product development?

To launch some features initially and add more later. Signup and view all the answers

What is the logical extension of a product withdrawal?

New product introduction Signup and view all the answers

Why do companies need to withdraw older products?

To make room for newer products Signup and view all the answers

What is the primary goal of stretching a product line?

To cover a wider price range Signup and view all the answers

What is an example of stretching a product line downwards?

Adding a product at a price point below the Honda Jazz model Signup and view all the answers

What is the primary reason for a company to withdraw a product from the market?

To make room for new products Signup and view all the answers

What is the relationship between product introduction and product withdrawal?

They are linked and complementary Signup and view all the answers

Why do companies launch products at the upper price spectrum of the market?

To stretch their product lines downwards Signup and view all the answers

What is the primary goal of product management in a company?

To manage a limited number of products Signup and view all the answers

What is a characteristic of individuals in the 'late majority' category?

They tend to resist change and are focused on traditions Signup and view all the answers

What is the primary goal of a company in the Introduction Stage of the Product Life Cycle?

To create brand awareness Signup and view all the answers

What is a key feature of the Growth Stage of the Product Life Cycle?

Profits rise rapidly Signup and view all the answers

What is a characteristic of the Maturity Phase of the Product Life Cycle?

Prices tend to stabilize Signup and view all the answers

What is a key strategy used in the Maturity Phase of the Product Life Cycle?

Reducing production costs to maintain profitability Signup and view all the answers

What is the primary goal of a company's pricing strategy in the Introduction Stage?

To penetration the market Signup and view all the answers

What is a key feature of competitive strategy in the Growth Stage?

Differentiating the product through marketing Signup and view all the answers

What is a characteristic of products in the Decline Stage of the Product Life Cycle?

The product is no longer profitable Signup and view all the answers

Study Notes

Withdrawal of a Product

Withdrawal of a product is a complex task linked with the introduction of a new product and a company's business strategy
It is essential to withdraw old products to make place for new ones due to limited resources

Increasing Products

New product introduction is a logical extension of product withdrawal
Companies can increase products in a product line through:
- Stretching the product line (upwards, downwards, or two-way)
- Enhancing the value proposition of their product (adding features)
- Launching consumer schemes (e.g., "additional 20% free" promotions)

Stretching the Product Line

Stretching down: adding a product at a lower price point (e.g., Honda Jazz to a lower-priced model)
Stretching up: adding a product at a higher price point
Two-way stretching: adding products at both higher and lower price points

Product Life Cycle (PLC)

Each stage of the PLC requires different professional disciplines, skills, tools, and processes
The PLC has five stages: introduction, growth, maturity, saturation, and decline
Each stage poses different challenges, provides opportunities, and creates problems for the seller
Profits rise and fall at different stages of the PLC
Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage

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Description

This quiz covers the strategic decisions involved in withdrawing a product from the market and introducing new ones, considering factors such as company resources and business strategy.