Product Flashcards
(13 cards)
What is a Product life cycle
a cycle which shows the stages that products go through from development to withdrawal from the market
May help the firm to identify when a product needs support, re design, reinvigorating, withdrawal
What are the stages of the Product life Cycle
- Development
- Introduction
- Growth
- Maturity
- Saturation
- Decline
- Withdrawal
Actions in the development stage
Market research
-identify gaps in the market
Monitoring
Competitors
Planned research
And developoment
Actions in the Introduction stage
Advertising and promotion
Campaigns
Maximise Publicity
High cost/ low sales
Actions in the Growth stage
Increased consumer awareness
Sales rise
Revenues increase
Costs- fixed cost / variable cost, profits may be made
Monitor market- Competitors’ reactions?
Actions made in the mature stage
sales, profits, and competition are at the highest peak and the firms are eagerly involved in sales promotional activities to maintain a competitive position in the market.
Actions in the saturation stage
competitors have begun to take a portion of the market and products will experience neither growth nor decline in sales.
Typically, this is the point when most consumers are using a product, but there are many competing companies.
Actions in decline and widthdrawl
the sales keep declining after reaching a long & consistent peak. In the decline stage, the product sales of the company reduce due to increasing competition or changing customer needs
Meaning of The Boston Matrix
A means of analysing the product portfolio and
Informing decision making about possible marketing
Targets
Meaning of stars
Are a high growth product and strong compared to
Their competition so they need heavy investment to sustain growth
Eventually growth will slow and assuming they keep their market share, stars will become cash cows
Meaning of Cash Cows
Are low-growth products with a high market share.
These are mature, successful products with relatively little
Need for investments
Meaning of Dogs
Refers to product that have a low market share in
Unattractive, low- growth markets. Dogs may generate enough cash to break-even, but they rarely, if ever worth investing in
Meaning of problem child
Are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger companies
