Product Life Cycle

Question 1

What are the 5 fazes of the life cycle

Answer 1

1. R&D
2. introduction
3. Growth
4. Maturity
5. Decline

Question 2

What is the lead time

Answer 2

The distance between coming up with idea & releasing it into the market

Question 3

What does the product life cycle depend on

Answer 3

The products e.g. coke has been around for decades cos it uses lots of extension strategies

Question 4

What is phase 1 of P.L.C

Answer 4

Research and development:

• new prod/process
• costly = (skilled labour, promotion & machinery
• revenue = 0
• negative cash flow due to no sales or revenue

Question 5

What is the second faze of the P.L.C

Answer 5

Introduction phase:
Introducing the prod to the market
- heavy promotion = create demand = high cost
- low sales = low producing = limited E.O.S = high U.C
- only distributing from one outlet
- depending on product = price skimming/ penetration
- negative cash flow

Question 6

What is the third phase

Answer 6

Growth phase:

• demand increasing = rapid growth
• increase customer loyalty from strong branding
• increase channels of distribution
• price strategies (skimming/ penetration = move to opposite)
• more sales = more output = E.O.S = +ve cash flow

Question 7

What is the 4th phase

Answer 7

Maturity phase:
- market is becoming saturated = low market growth ( cash cow)
- start retaining customer loyalty = promotion strategies = draw new customers as-well
E.g. offering better deals