Product Modification and Marketing Strategies Quiz
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Questions and Answers

What is a key objective of promotional expenditures during the introduction stage of a product?

  • Decrease competition
  • Improve product quality
  • Maximize profits
  • Secure distribution in retail outlets (correct)
  • What does a company typically do to sustain rapid market share growth during the growth stage of a product?

  • Introduce new models and flanker products (correct)
  • Increase prices to maximize profits
  • Decrease distribution channels
  • Shift from awareness to preference communications
  • In which stage of the product life cycle does the rate of sales growth slow down, and the product enters a phase of relative maturity?

  • Maturity stage (correct)
  • Growth stage
  • Decline stage
  • Introduction stage
  • What strategy may a company employ to expand the market for its mature brand?

    <p>Work on factors that make up sales volume</p> Signup and view all the answers

    What typically happens to profits and promotional expenditures in the decline stage of a product?

    <p>Profits are low or negative, and promotional expenditures decrease</p> Signup and view all the answers

    During which stage of the product life cycle do firms typically lower prices to attract price-sensitive buyers?

    <p>Decline stage</p> Signup and view all the answers

    What are the elements that brand managers might modify to stimulate sales?

    <p>Price, distribution, and communication</p> Signup and view all the answers

    In the decline stage, what strategy involves reducing costs while trying to maintain sales?

    <p>Harvesting</p> Signup and view all the answers

    What does quality improvement in product modification strategies aim to achieve?

    <p>Expand the product's performance</p> Signup and view all the answers

    What is a characteristic of style improvement in product modification strategies?

    <p>Increasing the product's esthetic appeal</p> Signup and view all the answers

    What is a key reason behind sales decline in the decline stage according to the text?

    <p>Technological advances</p> Signup and view all the answers

    In market-challenger strategies, what is one of the potential targets for a challenger firm?

    <p>&quot;Attacking firms its own size not doing the job&quot;</p> Signup and view all the answers

    What is a common challenge faced by companies in the decline stage of the product life cycle?

    <p>Rapid market growth</p> Signup and view all the answers

    How can companies overcome the challenge of fragmented markets in the maturity stage of the product life cycle?

    <p>Increasing the product development costs</p> Signup and view all the answers

    Which factor contributes to shorter product life cycles in the decline stage of the product life cycle?

    <p>Extended decline phase</p> Signup and view all the answers

    What is a key reason for companies facing capital shortages in the new product development process?

    <p>Satisfaction of consumer safety concerns</p> Signup and view all the answers

    How can poor launch timing impact new products in the market?

    <p>Causing insufficient interest in the products</p> Signup and view all the answers

    Why is it important for a new product to receive adequate organizational support?

    <p>To prevent rapid market growth</p> Signup and view all the answers

    Study Notes

    Product Life Cycle

    • A product goes through four stages: Introduction, Growth, Maturity, and Decline.

    Introduction Stage

    • Profits are negative or low, and promotional expenditures are high.
    • The goal is to inform potential consumers, induce product trial, and secure distribution in retail outlets.

    Growth Stage

    • The firm improves product quality, adds new features and styling, and introduces new models.
    • The firm enters new market segments, increases distribution coverage, and enters new distribution channels.
    • Communication shifts from awareness and trial to preference and loyalty.

    Maturity Stage

    • The rate of sales growth slows, and the product enters a stage of relative maturity.
    • The maturity stage has three phases: growth, stable, and decaying maturity.

    Marketing Strategies in Maturity Stage

    • Market modification: expanding the market for the mature brand.
    • Product modification: improving quality, features, or style.
    • Marketing program modification: modifying nonproduct elements like price, distribution, and communications.

    Product Modification Strategies

    • Quality improvement: increasing functional performance.
    • Feature improvement: adding size, weight, materials, supplements, and accessories.
    • Style improvement: increasing esthetic appeal.

    Decline Stage

    • Sales decline due to technological advances, shifts in consumer tastes, and increased competition.
    • Harvesting: reducing a product or business's costs while maintaining sales.

    Other Competitive Marketing Strategies

    • Market-challenger strategies: setting high aspirations and attacking the market leader or smaller firms.
    • Market-follower strategies: commercializing new products.

    New Product Development Process

    • Post-launch evaluation: performance analysis and continuous improvement.

    New Product Failures

    • Shortage of important ideas in certain areas.
    • Fragmented markets: targeting smaller market segments.
    • Social, economic, and governmental constraints.
    • Cost of development: high R&D, manufacturing, and marketing costs.
    • Capital shortages: difficulty raising funds for research and launch.
    • Poor launch timing: launching after the category has already taken off or when there is insufficient interest.
    • Shorter product life cycles: rivals quickly copying success.
    • Organizational support: lack of support from the corporate culture or financial support.

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    Description

    Test your knowledge on product modification and marketing strategies including quality improvement, feature improvement, marketing program modification, and stimulating sales through nonproduct elements.

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