24 Questions
From the customer's point of view, what is the impact of a price reduction on a product?
The customer may not put a high value on it.
How can a company enhance the value proposition of its product?
By providing additional features that the customer values.
What is the strategy behind gradually releasing enhanced features of a product?
To keep the customer engaged with innovations.
What is the goal of launching consumer schemes?
To create a perception of value without reducing prices.
What is the benefit of launching consumer schemes for a company?
It provides a small incremental cost for a perceived higher value.
What can a company do to stay ahead of competition?
Launch consumer schemes that provide a perceived value.
What is the advantage of providing additional features to a product?
It allows the customer to value the product higher.
What is the strategy behind product development?
To launch some features initially and add more later.
What is the logical extension of a product withdrawal?
New product introduction
Why do companies need to withdraw older products?
To make room for newer products
What is the primary goal of stretching a product line?
To cover a wider price range
What is an example of stretching a product line downwards?
Adding a product at a price point below the Honda Jazz model
What is the primary reason for a company to withdraw a product from the market?
To make room for new products
What is the relationship between product introduction and product withdrawal?
They are linked and complementary
Why do companies launch products at the upper price spectrum of the market?
To stretch their product lines downwards
What is the primary goal of product management in a company?
To manage a limited number of products
What is a characteristic of individuals in the 'late majority' category?
They tend to resist change and are focused on traditions
What is the primary goal of a company in the Introduction Stage of the Product Life Cycle?
To create brand awareness
What is a key feature of the Growth Stage of the Product Life Cycle?
Profits rise rapidly
What is a characteristic of the Maturity Phase of the Product Life Cycle?
Prices tend to stabilize
What is a key strategy used in the Maturity Phase of the Product Life Cycle?
Reducing production costs to maintain profitability
What is the primary goal of a company's pricing strategy in the Introduction Stage?
To penetration the market
What is a key feature of competitive strategy in the Growth Stage?
Differentiating the product through marketing
What is a characteristic of products in the Decline Stage of the Product Life Cycle?
The product is no longer profitable
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
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.
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