Product Life Cycle (PLC)

Question 1

Product Life Cycle (PLC)

Answer 1

The demand for a G&S can never last forever
The PLC describes the changes in consumer demand of a G&S over time
The PLC helps marketers determine how to promote their G&S

Question 2

Introduction Phase

Answer 2

Launch of a new G&S is very expensive (design costs, training personnel, advertising, distribution, packaging etc)
Thus, the initial price of a product when it enters the market is usually very high
Early adopters: adventurous consumers who like to be first to own new products
Example: DVD players cost $600 in 1997

Question 3

Growth Phase

Answer 3

Growing sales as product becomes more familiar from advertising & word of mouth
This is a critical time for the product - there’s a risk of busting
Competitors entering the market → price falling
Market Share: how much of the market you control compared to competitor
Example: Electric Cars

Question 4

Maturity Phase

Answer 4

Sales growth slows → profits remain
Costs have been recovered for research, production, distribution, sales and advertising.
Market is full of competitors, market share is stable, and price of product is low.
Examples: toilet paper, ketchup, milk, fridge

Question 5

Decline Phase

Answer 5

Sales and profits begin to decrease
Marketers try to adjust/improve/modify product or reduce price to reverse decline (add features).
Eventually product is removed from market.

Question 6

Fad

Answer 6

a product or service that is VERY popular for a SHORT time, and then disappears (i.e. Rubik’s Cubes, Pokemon Cards)

Question 7

Trends

Answer 7

more lasting effect on the market than a fad
Ex: move towards healthier lifestyles, Reality TV

Question 8

Niche Market:

Answer 8

firms that control and dominate a very small, specific section of the market
Ex: Pet Hotel

Question 9

Seasonal Market:

Answer 9

G&S only popular during particular seasons
Ex: ice cream → summer OR skiing → winter

Question 10

Brands with multicoloured logos often want to communicate that they are:

Answer 10

Multidisciplinary
Playful
Fun

Question 11

Consumer Profiles

Answer 11

PRODUCT – use the most appealing colours, materials, and other features for the target market.
PLACE – how to best deliver the G&S
PRICE – how much they are willing to spend
PROMOTION – how to create meaningful messages
– knowing which media is used (i.e. TV station)
EX: BABY BOOMERS (Born after WWII)

Question 12

Market Segmentation

Answer 12

To define their ideal customers and describe a customer profile, marketers divide the market based on:
Demographics
Geographics
Psychographics
Behaviour

Question 13

Demographics

Answer 13

Study of obvious characteristics that categorize people.
Age (tweens)
Gender (male / female)
Family Life Cycle (student / married / retired)
Income Level (below $20,000 / $100,000 +)
Ethnicity & Culture (white wedding gowns in China)

Question 14

Geographics

Answer 14

URBAN
Apartment or condo dwellers (DINKS)
Go to cultural events, restaurants & public transport
Live close to work & dress well
SUBURBAN
Own cars and drive to work
Spend money on gardens, BBQs
Have children
RURAL
Probably own truck / SUV
Own a large piece of land
Enjoy outdoors and have pets

Question 15

Psychographics

Answer 15

Religious beliefs
Lifestyle (i.e. exercise lovers also eat healthy)
Preferences
Attitudes
Personality traits
Hobbies
Political beliefs (i.e. socialist vs. capitalist)

Question 16

Behaviour

Answer 16

Includes grouping consumers based on:
Their purchase behaviour
Benefits sought when purchasing something
How and when this group uses your product
How often they use your product

Question 17

How Frequently Does the Consumer Use the Product?

Answer 17

Heavy Users
Medium & Light Users:
Non-users: