Product life cycle

• What is a key component of the marketing mix?

  The 4 Ps: product, price, place, promotion
• How does the product lifecycle relate to the marketing mix?

  It evolves as the product moves through phases
• How many phases are in the product lifecycle?

  Five phases
• What are the five phases of the product lifecycle?

  1. Research and Development
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
• What happens during the research and development phase?

  Ideas are developed and prepared for market
• What is the cash flow situation in the research and development phase?

  Negative cash flow
• What is the primary goal during the introduction phase?

  Create customer awareness and demand
• How does promotion change in the introduction phase?

  It requires heavy promotion to create awareness
• What is the expected sales trend during the growth phase?

  Rapid increase in sales
• What should a company focus on during the growth phase?

  Building brand loyalty and increasing outlets
• What happens to unit costs during the growth phase?

  They decrease due to economies of scale
• What characterizes the maturity phase of the product lifecycle?

  Sales peak and market saturation occurs
• What strategies should be employed in the maturity phase?

  Retention strategies to maintain customer loyalty
• How does the cash flow situation change in the maturity phase?

  Cash flow is likely at its best
• What is the decline phase characterized by?

  Market shrinkage and reduced sales
• What should companies focus on during the decline phase?

  Maintaining loyal customers through branding
• What is a potential strategy for products in decline?

  Using them as loss leaders in a portfolio
• What is the significance of extension strategies in the product lifecycle?

  They help maintain sales during maturity or decline
• What is the shape of the product lifecycle graph?

  Sales over time with distinct phases
• What does the lead time refer to in the product lifecycle?

  The time from idea to market release
• How do economies of scale affect unit costs?

  They reduce unit costs as production increases
• What is the relationship between sales and production in the growth phase?

  Increased sales lead to higher production output
• What is a common outcome of market saturation in the maturity phase?

  Low market growth
• What should companies do to attract customers from competitors in the maturity phase?

  Implement switching strategies and promotions
• What happens to cash flow as a product enters the decline phase?

  Cash flow is likely to start reducing
• What is the importance of branding in the decline phase?

  To retain loyal customers amidst market shrinkage
• What is the goal of promotion in the decline phase?

  Focus on branding for loyal customers
• What is a loss leader in the context of the decline phase?

  A product sold at a loss to attract customers
• How can extension strategies impact a product in decline?

  They can help maintain sales and prolong lifecycle