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Question
Mention the various stages of 'Product Life Cycle'.
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Solution
- Introduction Stage: After research and development, the new product will be launched in the market. Cost incurred in launching the product will be high and sales may be low. Since the product is of a new variety, competition is virtually absent, market is limited and prices are relatively high. This stage is also very risky because a high percentage of new products fail during this period. Effective strategies like introductory offer, money-back guarantee, removing technical and other deficiencies etc., may be employed.
- Growth Stage: Sales increase and competitors enter the market. Having covered its research and development costs the product becomes profitable. In this stage, promotional focus shifts from "buy my product to buy my brand". Strategies like heavy advertising, expanding distribution channels and keeping the price at competitive levels may be employed.
- Maturity Stage: During this stage, sales continue to grow but at a decreasing rate and markets get stabilised. Falling prices will reduce profits. Producers attempt to differentiate products, and brands are key to this attempt. The market reaches saturation.
- Decline Stage: Sales falls down sharply and product becomes obsolete. Either more innovative products are introduced, or consumer tastes have changed. Most firms shift their attention to other products. For example, the market for black and white TV in our country has declined.
RELATED QUESTIONS
The following are all major stages of a product life cycle except ______.
The strategy of selective distribution may be employed during ______ stage of product life cycle.
What happens to a product in the decline stage of its life cycle?
You are the Marketing Manager of a fast moving consumer goods (FMCG) company and you find that one of your products, a washing detergent, is in its grown stage. Describe the steps that you would take to increase your sales in this stage.
Explain the maturity stage of the product life cycle.
Explain the decline stage of the product life cycle.
Explain the abandonment stage of the product life cycle.
Explain the strategies to be adopted during the growth stage of the Product Life Cycle.
Explain the second and third stage of product life cycle.
"Introduction Stage in a product life cycle is not very risky." Justify either or against.
