Product Flashcards
(51 cards)
what are the stages of the product life cycle
RIGMSD
research & development introduction growth maturity saturation decline
what happens in the r&d stage of the product life cycle
product is being researched and developers and prototypes are made and tested- changes can be made after feedback
what impact does r&d have on sales
no sales as product still being developed
what impact does r&d have on profits
product will be making a loss due to development costs and 0 income from sales
what happens in the introduction stage of the product life cycle
the product is launched onto the market and promotional activities are introduced to create hype
what impact does introduction have on sales
sales slow to begin with as customers are unsure of product and may need persuaded to move from competitors products
what impact does introduction have on profits
product begins to cut into losses from development costs but promotional costs result in loss made overall
what happens in the growth stage of the product life cycle
the product has been on the market for some time and customers are aware of product and are purchasing it
what impact does growth have on sales
sales start to rise rapidly - due to slightly reduced prices, lack of
competition or consumer confidence in product
what impact does growth have on profits
profits start to made and losses from development and promotion during initial stages are recovered
what happens in the maturity stage of the product life cycle
product had been on the market for some time and competition begins to enter market
what impact does maturity have on sales
sales growth peaks & levels out- sales can still be made for a long time though
what impact does maturity have on profits
profits can still be healthy but start to fall as completion takes away sales and thus profits fall
what happens in the saturation stage of the product life cycle
product suffers from too many competitors in the market
what impact does saturation have on sales
sales continue to fall as consumers flock to competitors products
what impact does saturation have on profits
profits fall rapidly,
especially if prices are cut to encourage more sales
what happens in the decline stage of the product life cycle
products life is nearing the end and will stop being produced
what impact does decline have on sales
sales fall rapidly and product will eventually be withdrawn from market
what impact does decline have on profits
profits will continue to fall and product will eventually be sold at unit cost just to break even
what are the trends in sales during the product life cycle
no sales slow sales rapid rising sales sales peak sales fall sales fall rapidly
what are the trends in profits during the product life cycle
loss cut into losses profits made healthy but fall fall rapidly continue to fall- sold at unit cost
what are extension strategies
where sales begin to fall as a product matured and a business attempts to inject new life into product
what are the extension strategies
- lowering price of product
- changing place product is sold
- altering methods of promotion
- rebranding product
- developing product variations
- changing packaging
- changing use
what is product portfolio
having a range of products on sale
