5.10

• Every product has a life cycle, from the time it is introduced to the market,

  until it is eventually overtaken by an updated version or a complete

  replacement.
• A business must be able to launch, modify and delete products from its

  range in response to changes in the marketplace, which ultimately affect a

  product’s life cycle. Failure to do so will result in declining sales and

  reduced profits.
• All successful products go through a life cycle, from the introduction into

  the market, gradual growth in sales, a period of maturity when sales are at

  a maximum, through gradual decline as the consumer tastes change or new

  products come on to the market to replace it. In some cases, a product can

  be diverted from its decline if new markets are found, or the product is

  modified or diversified in some way to attract a new customer base. The

  following graph shows the progress of this life cycle over time.
• What is the introduction stage in product development?

  The period during which a new product is launched into the market
• What is the primary goal of the introduction stage for a business?

  To increase consumer awareness and build market share for the new product
• What is established regarding the product during the introduction stage?

  The brand and reliability are established
• Why is the price often lower than competitors' prices during the introduction stage?

  To gain sales in the market
• How is distribution handled during the introduction stage?

  Distribution is selective
• What is the purpose of selective distribution in the introduction stage?


  To enable consumers to gradually form an acceptance of the product
• Who is the target audience for promotion during the introduction stage?

  Early buyers and users
• What is the focus of communications in the promotion during the introduction stage?

  To educate potential customers about the merits of the new product
• What is the role of staff during the introduction stage?

  Staff are trained to explain the new product to customers
• What should staff highlight when explaining the new product to customers?

  Any innovative features not previously available
• What type of information is provided as physical evidence during the introduction stage?

  Detailed information about testing of the new product and verifiable evidence of its unique features
• Why are warranties and after-sales service highlighted during the introduction stage?

  As a reassurance to customers trying the new product for the first time
• The growth stage is a time when the product begins to increase sales to customers. In this

  stage, brand acceptance and market share are actively pursued by the producers of the

  product.
• Product: The product’s quality is maintained and improved and support services may be

  added.
• Price: The price per unit of production is maintained as the business enjoys increased

  consumer demand and a growing market share.
• Distribution: Distribution channels are increased as the product becomes more popular.
• Promotion: Promotion now seeks a wider audience.
• People: Satisfied customers can be more easily relied on to provide testimony about the

  quality and value of the product.
• Physical evidence: As the product becomes more mainstream, more evidence of its

  successful use in a variety of situations can be provided.
• Process: After-sales service and customer follow-up processes become entrenched in the

  business.
• What occurs during the maturity stage of a product's life cycle?

  The product is fully accepted into the market and sales reach their peak.
• What happens to sales during the maturity stage?

  Sales plateau as the market becomes saturated.
• How can a product differentiate itself in the maturity stage?

  By enhancing its features and packaging compared to competitors.
• Why might a company need to adjust its pricing strategy during the maturity stage?

  To hold off competitors and maintain market share.
• What might be necessary to encourage preference for a product over rivals in the maturity stage?

  Incentives may need to be offered.
• What is the goal of promotion during the maturity stage?

  To suggest that the product is still the best.
• How should staff interact with customers regarding the product during the maturity stage?

  They need to direct customers to the unique features of the product.
• Why is physical evidence important during the maturity stage?

  Customers are likely to be more aware of the product and its competitors.
• What is the status of processes related to the sale and service of the product during the maturity stage?

  All systems and processes are firmly established.
• What does market saturation refer to in the context of the maturity stage?

  It refers to the point where the market is fully accepting the product and no new customers are being acquired.
• How does competition affect a product during the maturity stage?

  Competition may require adjustments in pricing and promotional strategies to maintain market share.
• Why is maintaining market share crucial during the maturity stage?

  To ensure the product remains profitable and competitive in a saturated market.
• How does customer awareness influence marketing strategies in the maturity stage?

  Increased customer awareness necessitates stronger differentiation and evidence of unique features in marketing efforts.
• A product will reach the decline stage when it no longer appeals to the customer. This

  may be because it has been superseded by newer, or more technologically advanced,

  competitors or because customer tastes have changed. During this stage, sales begin to

  decline.
• What does diversification involve?


  New products and new markets
• Why do businesses engage in diversification?

  To spread the risks encountered by a business
• What principle is diversification based on?


  Not putting all your eggs in one basket