Podcast
Questions and Answers
Which of the following best describes the primary marketing objective during the introduction stage of the product life cycle?
Which of the following best describes the primary marketing objective during the introduction stage of the product life cycle?
- Informing consumers about the product's existence through informative advertising (correct)
- Maximizing profits by setting prices higher than competitors
- Reducing advertising spending to allocate budget to newer products
- Establishing brand loyalty through persuasive advertising
Price skimming is most likely to be used during the maturity stage of the product life cycle due to intense competition.
Price skimming is most likely to be used during the maturity stage of the product life cycle due to intense competition.
False (B)
In which stage of the product life cycle are profits typically at their highest?
In which stage of the product life cycle are profits typically at their highest?
Maturity
During the saturation stage, the level of advertising is typically ______ and stable, but profits begin to fall.
During the saturation stage, the level of advertising is typically ______ and stable, but profits begin to fall.
Match the product life cycle stage with the corresponding pricing strategy:
Match the product life cycle stage with the corresponding pricing strategy:
Which factor primarily dictates the length of a product's life cycle?
Which factor primarily dictates the length of a product's life cycle?
Advertising spending is typically highest during the decline stage of the product life cycle to revitalize sales.
Advertising spending is typically highest during the decline stage of the product life cycle to revitalize sales.
What is the term for strategies employed to extend the sales of a product facing decline?
What is the term for strategies employed to extend the sales of a product facing decline?
Persuasive advertising, aimed at fostering brand loyalty, is most commonly utilized during the ______ stage of the product life cycle.
Persuasive advertising, aimed at fostering brand loyalty, is most commonly utilized during the ______ stage of the product life cycle.
What is the primary reason for a product to be withdrawn from the market during the decline stage?
What is the primary reason for a product to be withdrawn from the market during the decline stage?
In the growth stage, companies tend to decrease prices substantially to gain more customers.
In the growth stage, companies tend to decrease prices substantially to gain more customers.
During which stage of the product life cycle does advertising shift from being informative to being persuasive?
During which stage of the product life cycle does advertising shift from being informative to being persuasive?
The stage in the product life cycle where sales reach their highest point and then stabilize is known as the ______ stage.
The stage in the product life cycle where sales reach their highest point and then stabilize is known as the ______ stage.
Which of the following exemplifies a product that typically has a shorter product life cycle?
Which of the following exemplifies a product that typically has a shorter product life cycle?
Match the following product characteristics with their typical life cycle length:
Match the following product characteristics with their typical life cycle length:
Flashcards
Product Life Cycle
Product Life Cycle
The stages a product goes through from development to decline in the market.
Development Stage
Development Stage
The initial stage where a product is developed and tested before being released to the market.
Introduction Stage
Introduction Stage
The stage when a product is first launched; growth is slow due to low awareness.
Growth Stage
Growth Stage
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Maturity phase
Maturity phase
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Saturation Stage
Saturation Stage
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Decline Stage
Decline Stage
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Price Skimming
Price Skimming
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Pricing in Growth Stage
Pricing in Growth Stage
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Pricing in Saturation/Maturity Stage
Pricing in Saturation/Maturity Stage
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Pricing in Decline Stage
Pricing in Decline Stage
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Promotion in Introduction Stage
Promotion in Introduction Stage
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Promotion in Later Stages
Promotion in Later Stages
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Promotion and Extension Strategy
Promotion and Extension Strategy
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Study Notes
- Products have a limited lifespan, following a typical cycle from development to decline.
Product Life Cycle Stages
- Development: Prototypes are tested, and market research is conducted before the product's market launch, with no sales during this phase.
- Introduction: The product is launched, sales grow slowly due to low consumer awareness, informative advertising is used, price skimming may be used, and no profits are made yet.
- Growth: Sales increase rapidly, advertising shifts to persuasive, prices decrease slightly due to new competitors, and profits begin as development costs are covered.
- Maturity: Sales increase slowly, competition intensifies, competitive or promotional pricing is used, advertising maintains sales growth, and profits peak.
- Saturation: Sales stabilize at their highest, competition is high with no new entrants, competitive pricing is used, advertising remains high with stable spending, and profits decline.
- Decline: Sales decrease due to new products or loss of appeal, the product is withdrawn when unprofitable, and advertising is reduced.
- The product life cycle is usually represented graphically showing sales volume over time.
Life Cycle Length
- Varies significantly based on the product type.
- Fashionable items have shorter cycles, while food products have longer cycles.
- Technology advancements can quickly shorten product life cycles.
Impact on Marketing Decisions
- Understanding a product's life cycle stage informs pricing and promotion strategies.
Pricing Strategies
- Introduction: Branded products are priced high to indicate quality.
- Growth: Prices are relatively high compared to competitors due to the product's novelty.
- Maturity/Saturation: Prices are reduced to prevent sales decline amid competition.
- Decline: Significant price discounts may be offered, especially if no life extension is planned.
Promotion Strategies
- Introduction: High promotional spending informs consumers and establishes a brand identity.
- Later Stages: Advertising is reduced as the product becomes well-known, or the budget shifts to newer products.
- Extension Strategy: Promotion spending may increase to inform and convince customers to repurchase the product.
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