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Flashcards in Product Life Cycle & BCG Matrix Deck (18):

What are the 4 stages of the Product Life Cycle (PLC)?

1. Introduction
2. Growth
3. Maturity
4. Decline


Give details about the "introduction" phase of the PLC (4 points)?

- Sales slowly build
- Profit negative due to R&D / setup costs
- Priority is to build awareness
- High failure rate


Describe the "growth" phase of the PLC (4 points)...

- Sales increase
- Monopoly window
- Priority is tobuild the brand
- Need to think about "potential product" for when competitors enter the marke


Describe the "maturity" phase of the PLC (4 points)..

- Sales level out
- Competitors well established
- Risk of product becoming oudated, may need refreshing
- May need to target a different market


What happens in the "decline" phase of the PLC (2 points)?

What options does the firm have (3 points)?

- Profits and sales fall
- Substitutes may be the cause of declining sales

Firm can...
- Maximise returns while possible
- Sell the rights to the product
- Withdraw the product


What is the Boston Consulting Group (BCG) Matrix (3 points)?

Formed in 1968

A tool for firms to analyse their product line

Offers a snapshot a products current position in the market


What is the difference between a product line and a product range?

Line: group of related products that targets a particular segment of the market e.g. pasta & sauces. Lynx shower gel & body spray

Range: Portfolio of products sold by a company e.g. Mars sells chocolate and pet food


What are the 4 product classifications in the BCG Matrix?


Question Mark (Problem Child)

Cash Cow



Give 5 characteristics of a "Star"?

- Rapid growth
- Dominates market share
- Requires high investment
- High profits
- Still has potential to grow


Give 3 characteristics of a "Question Mark"?

- Rapid growth
- Low market share (company doing something wrong OR product is new)
- Requires high investment


Give 4 characteristics of a "Cash Cow"?

- Low growth
- High market share
- Little investment required (well established)
- Still very profitable


Give 4 characteristics of a "Dog"?

- Low growth
- Low market share
- Product in decline - little investment
- Small/negative profits


What is Ansoff's Growth Strategies Matrix?

A strategic planning tool for a company to determine strategies for growth


What are the 4 suggested marketing strategies in Ansoffs growth matrix?

Market Penetration

Product Development

Market Development



Describe the "market penetration" strategy?

- Undercutting price/increasing promotional base of already established products

- Low risk


What is the "Product Development" strategy?

-Develop new products, introduce them into existing markets

- Product directly competes with existing competitors. Must outperform them.

- Medium risk


Describe the "Market development" strategy?

- New market found for existing produce

- New segments -> market research required

- Medium risk


What is the "Diversification" strategy?

- New product, new market

- Product not necessarily in line with companies existing competencies (E.g. Virgin)

- High risk