Marketing > EXAM REVIEW > University of Toronto MGMA 01 bill12377777 (All)

University of Toronto MGMA 01 bill12377777

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Final Review Q1. Please draw and explain, with examples, the typical product life cycle model, identifying clearly the four stages. Please explain with examples the different marketing objectives and practices at each of the different stages. Also draw and explain, with at least one example each, the product life cycle for a low learning, high learning (Chapter 11), fad and fashion product. - Chapter 10 Product Life-Cycle Strategies: Product Life Cycle (PLC): The course of a product’s sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline. 1. Product development begins when the company finds and develops a new-product idea. During product development, sales are zero and the company’s investment costs mount. 2. Introduction is a period of slow sales growth as the product is introduced in the market. Profits are non-existent in this stage because of the heavy expenses of product introduction. 3. Growth is a period of rapid market acceptance and increasing profits. 4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition. 5. Decline is the period when sales fall off and profits drop. The company wants to earn a decent profit to cover all of the effort and risk that went into launching it. The PLC concept can help in developing good marketing strategies for its different stages. But using it for forecasting product performance or developing marketing strategies presents practical problems because strategy is both a cause and a result of the PLC. The moral of the product life cycle is that companies must continually develop a steady stream of new products that bring new value to customers or else they risk extinction. Brands like Coca-Cola and American Express are still going strong after more than 100 years. The PLC concept can describe a product class (gasoline-powered automobiles), a product form (SUVs), or a brand(the Ford Escape). A specific brand’s life cycle can change quickly because of changing competitive attacks and responses. Although laundry soaps (product class) and powdered detergents (product form) have enjoyed fairly long-life cycles, the life cycles of specific brands have tended to be much shorter. Today’s leading brands is Tide and Cheer; 100 years ago was Kirkman.

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