product Flashcards
(22 cards)
3 consumer products
convenience products
shopping products
speciality products
3 industrial products
material and parts
capital items
supplies and services
stages in product life cycle
development
introduction
growth
maturity
decline/end
development stage
complex
may not be successful
introduction
- launched into market
- low sales
- high unit costs
- negative cash flow usually
growth stage
- expanding market , arrival of competitors
- fast growing sales
- cash flow positive maybe?
maturity
- slower sales as rivals enter
- cash flow strongly positive
- prices/profit fall
decline
falling sales
- market saturation/competitors
- decline in profits and weaker cash flow
why do products enter decline stage
- tech advances
- increased comp
extending product life cycle
lower price
chang eprudct e.g restyle
- new use for the product
weakness of product life cycle
- shape/ duration of cycle , varies from product to product
- strategic decisions can change life cycle
- decline isn’t inevitable
product portfolio analsis
assess position of each product in a firms portfolio to determine right marketing strategies for each
comparison between Boston matrix and product life cycle
plc
- concerned with individual products and sales overtime
bm -
concerned with firms portfolio of products, and focuses on cash flow from products
Boston matrix
- took used to see companies products and help decide to invest develop or discontinue products
- on the side = market growth
on the bottom = market share
high low
high STARS QUESTION MARK
low. CASH COWS DOGS
star products
- high share , high market growth
- cash flow = neutral , a little positive
strategy for star products
investment to sustain growth
- challenge competitors
question mark products
- high market growth , low market share
cash flow negative
- future is uncertain
- low share of rapidly growing market
strategy for question marks
- invest to increase market share
-build selectively
cash cows products
- high share slow growing market
- large cash inflow
-mature successful product
strategy for cash cows
- defend market share
- aim for short term profits
- little need for investments
dog products
- failed products
or
decline phase of life cycle - low share of slowly growing market
strategy for dog products
- sell off
- not worth investing in
- any profit made has to be re invested just to maintain market share
