Thursday 23 February 2012

Quiz 1 n Quiz 2 MKT243

Instruction:
QUIZ 1: Ch14 n Ch16: answer any 20 questions.

QUIZ 2: Ch 17 n Ch 18: answer any 20 questions.

Turned in by FRIDAY 2 march 2012. The earlier the better. Jangan tangguhkan kerja. Pigeon hole number 43. Nombor bilik L1-43. My Hp nombor 013 7798284.

All answers turned in must be on a piece of paper and on one page only. Make sure the chapters and numbering are correctly written.
No copying and no late submission

Chapter 14—Integrated Marketing Communications.

TRUE/FALSE

​1.​Promotion basically refers to firms communicating with their target markets.

2.​The marketing mix is the combination of promotion tools used to reach the target market and fulfill the organization's overall goals.


​3.​Advertising is any form of impersonal, one-way mass communication in which the sponsor is identified.

​4.​Publicity is free.


​5.​Sales promotion is generally a short-run tool used to stimulate immediate increases in product demand.


​6.​When a marketer sends a message to its target market, the marketer must first decode the symbols used


​7.​All promotions perform one or more of the following three tasks: to inform, to persuade, or to remind the target audience.


​8.​AIDA stands for Attitudes-Involvement-Decision-Action.


​9.​The AIDA concept can be used to explain how all promotions influence purchase decisions.


Chapter 16—Sales Promotion and Personal Selling

TRUE/FALSE

​10.​A sales promotion campaign could include any (or all) of the four promotional elements of the promotional mix.

​11.​Advertising is generally cheaper than sales promotions, and its results are easier to measure.


​12.​Sales promotion consists of promotional activities designed to encourage product trial and repeat purchase behavior in the long term of a product's life.


​13.​Coupons are more likely to be encourage repeat purchases by regular users than stimulate product trial by nonusers.


​14.​When Intel offers to pay $100 to customers who buy a computer with an Intel Celeron processor, it is an example of a premium offer.


​15.​Point-of-purchase promotions are an extremely important sales promotion tool because up to 70 percent of all purchase decisions are made in the store.


​16.​A trade allowance is a price reduction offered by retailers to customers who are buying homogeneous shopping goods.


​17.​Trade shows are an excellent place to introduce new products to the marketplace.


​18.​Trade promotions are popular among manufacturers because they help manufacturers gain new distributors, obtain intermediary support for consumer promotions, and improve trade relations.


​19.​Personal selling becomes a more important promotional tool as product complexity and buyer risk diminish.


​20.​Consultative selling is also called relationship selling.


​21.​Relationship selling is more typically found in selling situations for industrial type goods, such as equipment used to build highways.


​22.​With relationship selling the salesperson would spend most of his or her contact time with the prospect talking about the product because the salesperson does not want to waste the customer's time.

​23.​In relationship selling, salespeople focus more time on qualifying leads than on generating leads.

Chapter 17—Pricing Concepts


MULTIPLE CHOICE

​1.​Price is best described as:

a.the perceived value of a good or service
b.money exchanged for a good or service
c.the psychological results of purchasing
d.the cost in dollars for a good or service as set by the producer
e.the value of a barter good in an exchange


​2.​Revenue:
a.equals quantity sold times profit margin
b.equals price minus costs
c.equals return on investment
d.is synonymous with profit
e.equals price of goods times quantity sold


​3.​What is left over after paying for company activities is:
a.return on investment
b.revenue
c.profit
d.net worth
e.a current asset



​4.​Why are marketing managers finding it more difficult to set prices in today's environment?
a.Inflationary and recessionary periods have made customers less price-sensitive.
b.Fewer dealer and generic brands are available because the competition has been eliminated.
c.The high rate of new product introductions has led to careful reevaluation by consumers.
d.Marketing managers are finding it difficult to compare prices between suppliers.
e.Buyers are less informed and are less price-sensitive.



​5.​For convenience, pricing objectives can be divided into three categories. They are:
a.returnable, competitive, and attainable
b.measurable, competitive, and unique
c.general, attainable, and unique
d.profit-oriented, sales-oriented, and status quo
e.competitive, fixed, and variable



​6.​An organization is using _____ when it sets its prices so that total revenue is as large as possible relative to total costs.
a.profit maximization
b.market share pricing
c.demand-oriented pricing
d.sales maximization
e.status quo pricing



​7.​_____ measures the overall effectiveness of management in generating profits with its available assets.
a.ROI
b.EOQ
c.JIT
d.UPC
e.BEQ



​8.​The Dockside Restaurant managed to exceed its target ROI for the current fiscal year. The following results were found on its financial statements:


​9.​Mikell has recently opened a n athletic equipment store near a college campus. He cannot decide whether to base his firm's pricing objectives on market share, dollar sales, or unit sales. Regardless of which he chooses, his firm's pricing objective can be categorized as:
a.status-quo
b.profit-oriented
c.need-oriented
d.cost-oriented
e.sales-oriented



​10.​Market share pricing is a:
a.profit-oriented pricing technique
b.sales-oriented concept
c.demand-oriented concept
d.supply-oriented concept
e.status quo pricing technique


​11.​As a short-term pricing objective, _____ can be effectively used on a temporary basis to sell off excessive inventory.
a.profit maximization
b.profit-oriented pricing
c.status quo pricing
d.sales maximization
e.market share pricing



​12.​If a company's pricing objective is to meet the competition or to maintain existing prices, it is using _____ pricing.
a.head-on
b.target return on investment
c.status quo
d.market share
e.peer pricing



​13.​One of the advantages associated with status quo pricing is that it:
a.is based on actual costs of manufacturing
b.maintains the organization's differential advantage
c.is active, not reactive
d.causes price wars
e.requires little planning



​14.​Although many factors can influence price, the primary determinants are:
a.costs of manufacturing and distribution
b.the demand for the good and the cost to the seller
c.demand by the consumer and perceived quality
d.distribution and promotion strategies
e.stage of the product life cycle and costs to the consumer


​15.​The quantity of a product that people will buy depends on its price, but the quantity of product that will be sold in the market at various prices for a specified period is called:
a.price
b.demand
c.supply
d.determinant
e.costs


​16.​The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:
a.distribution
b.costs
c.demand
d.promotion
e.quality


​17.​The quantity of a product that people will buy/demand is most dependent on its:
a.distribution
b.supply
c.promotion
d.quality
e.price



Chapter 18—Setting the Right Price

MULTIPLE CHOICE

​18.​A company's pricing strategy should do all of the following EXCEPT:
a.give direction for price movements over the product life cycle
b.define the initial price
c.ignore the targeting and positioning strategy of the company
d.set a competitive price
e.interact with the other elements of the marketing mix


​19.​A 16-ounce bottle of Prairie Herb vinegar sells for $4.95, and a 16-ounce bottle of Heinz vinegar costs $1.05. Prairie Herb vinegar is new to the market, perceived to be of higher quality and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar. Prairie Herb vinegar is most likely using a _____ pricing policy.
a.penetration
b.status quo
c.price skimming
d.zoning
e.basing-point


​20.​A shortage of blood for transfusions for injured animals has resulted in the introduction of a synthesized product called Oxyglobin, which can be used effectively as a blood replacement. The manufacturer of the product has put a high price on the product in order to recoup its research and development costs. The manufacturer of Oxyglobin is using a _____ policy.
a.price-banding
b.penetration pricing
c.price-lining
d.price-zoning
e.price-skimming


​21.​The price-skimming strategy is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products. This strategy works best when:
a.competition is abundant
b.revenues are equal to expenses
c.supply is greater than demand
d.production capacity is large and flexible
e.demand is greater than supply



​22.​When a firm introduces a new product at a relatively low price because it hopes to reach the mass market, it is following a _____ strategy. The low price is designed to capture a large share of a substantial market and produce lower production costs.
a.penetration pricing
b.price-insensitive demand
c.price-skimming
d.flexible price
e.base price


​23.​A penetration strategy tends to be effective in a price-sensitive market. Thus, one of the purposes of penetration pricing is to:
a.recoup product development costs quickly
b.discourage competitors from entering the market
c.produce a large margin of profit per unit
d.develop exclusive distribution
e.attract the price-insensitive buyer who demands the latest in technology.

​24.​Penetration pricing means charging a relatively low price for a product as a way to reach the mass market. The low price is designed to capture a large share of a substantial market. Thus, penetration pricing:
a.tends to be more effective in a less price-sensitive market
b.tempts competitors to enter the market
c.provides a large profit per unit sold
d.recoups product development costs quickly
e.tends to lower production costs


​25.​To achieve its status as the industry's second fastest-growing personal computer manufacturer, Dell Computer set a relatively low introductory price for its computers as a way to reach the mass market. Dell used a _____ pricing policy.
a.penetration
b.flexible
c.skimming
d.zone
e.absorption


26.​A penetration pricing strategy tends to be most effective:
a.when demand is relatively inelastic
b.under unitary conditions
c.in price-sensitive markets
d.when the company can only perform small production runs
e.if unit costs are high


​27.​A firm charging a price identical to or very close to the competition's price is using a _____ strategy.
a.price-skimming
b.penetration pricing
c.predatory pricing
d.status quo pricing
e.leader pricing


​28.​The Association of Specialty Surgical Practice has published a minimum fee schedule for services and distributed this schedule throughout the medical profession. Specialty Surgical is engaged in:
a.price fixing
b.bait pricing
c.unfair trade practices
d.price discrimination
e.predatory pricing



​29.​Hayward Distributors sells name-brand kitchen appliances to businesses and institutions. It charges a substantially lower price to companies that operate multiple locations where its appliances can be used -such as a restaurant chain. It charges a higher price to companies that have fewer than three operations because there is much less opportunity for repeat business. Hayward Distributors is engaging in:
a.unfair trade practices
b.price fixing
c.price discrimination
d.predatory pricing
e.bait pricing


​30.​The Sharp Razor Company sells its disposable razors to several large discount retailers but gives special allowances only to one retailer. Sharp Razor is practicing:
a.unfair trade practices
b.predatory pricing
c.bait pricing
d.price fixing
e.price discrimination


​31.​If Microsoft Computers suddenly started to charge very low prices for their software with the intention of driving smaller competitors out of the market, Microsoft would be guilty of:
a.predatory pricing
b.unfair trade practices
c.bait pricing
d.price fixing
e.price discrimination


​32.​After mangers understand both the legal and the marketing consequences of price strategies, they should set a(n) _____ price, the general level at which a company expects to sell a good or service.
a.introductory
b.zone
c.demand
d.leader
e.base


​33.​When a buyer pays a lower price for buying in multiple units or above a specified dollar amount, the buyer is receiving a:
a.functional discount
b.cash discount
c.rebate
d.promotional allowance
e.quantity discount


Saturday 11 February 2012

Gambar

CH 10 Lamb Product Life Cycle and New Product Development


CHAPTER 10   Developing and Managing Products

Chapter Features


Chapter Features
Key Points
Opening Vignette
Chrysler and other carmakers are relying on the Internet to streamline their new product development process.
Ethics in Marketing
New product claims should be legally substantiated with scientific proof. This is especially important in the tobacco industry.
Global Marketing
[No global marketing box for this chapter.]
Use It
Students can find information on how to get loans to start a new business on the Internet.
Apply It (Application for Entrepreneurs)
Some product innovations are found completely by accident.
Try It (Entrepreneurship Case)
Marketers must consider the diffusion of innovation in order to successfully launch a new product.
CNN video clip
Launching new products through a technology trade show.
PBS Small Business School
When Karsten Solheim invented the now-famous Ping putter, the innovation did not take off quite as well as he had hoped. Clip deals with product development and diffusion of innovation.

Lesson Plan for Lecture

Before Class Preparation:


·         For instructors: 1) Study the chapter thoroughly; 2) bring PowerPoint slides and/or transparencies to class; 3) bring any “props” that will help you communicate an overview of marketing.

·         For students: 1) Read the chapter; 2) complete the Study Guide for this chapter.


Learning Objectives and Topics
PowerPoint Slides
Transparencies
1       Explain the importance of developing new products and describe the six categories of new products.
1.1    The Importance of New Products

1:   Developing and Managing Products
2:   Learning Objectives
3:   Learning Objectives (continued)
4:   Learning Objective (H)
5:   New Product
6:   New Product Introductions 1964-2000 (H)
7:   Categories of New Products (V)

2       Explain the steps in the new-product development process.
2.1      The New-Product Development Process
8:   Learning Objective
9:   New-Product Development Process
10:   New-Product Development Process
11: Idea Generation (H)
12: Brainstorming
13: Idea Screening
14: Concept Test
15: Business Analysis
16: Development
17: Simultaneous Product Development
18: Test Marketing (H)
19: Checklist for Selecting Test Markets
20: Alternatives to Test Marketing
21: Commercialization



10-1: New-Product Development Process
10-2: Idea Generation



10-3: Business Analysis
10-4: Development






10-5:   Commercialization
3       Explain why some products succeed and others fail.

22: Learning Objective
23: Why New Products Fail (V)
24: Success Factors (H)
25: Success Factors

10-6: Why New Products Fail
10-7: Success Factors
4       Discuss global issues in new-product development.
4.1     Global Issues in New-Product Development
26: Learning Objective
27: Global Issues (H)


5       Explain the diffusion process through which new products are adopted.
5.1      The Spread of New Products
28: Learning Objective
29: Diffusion
30: Categories of Adopters
31: Diffusion of Three Familiar Products among U.S. Households
32: Categories of Adopters
33: Product Characteristics and the Rate of Adoption (H)
34: Marketing Implications of the Adoption Process





10-8: Categories of Adopters
10-9: Product Characteristics and the Rate of Adoption
6       Explain the concept of product life cycles.
6.1    Product Life Cycles
35: Learning Objective
36: Product Life Cycle
37: Product Life Cycle
38: Product Life Cycle for Styles, Fashions, and Fads
39: Extending the PLC (V)
40: Introductory Stage (V)
41: Growth Stage
42: Maturity Stage (H)
43: Decline Stage
44: Marketing Strategies for PLC

45: Diffusion Process and PLC Curve


10-10: Product Life Cycle







10-11: Marketing Strategies for PLC
10-12: Diffusion Process and PLC Curve



 




Learning Objectives

1         Explain the importance of developing new products and describe the six categories of new products

2         Explain the steps in the new-product development process


3            Explain why some products succeed and others fail


4         Explain the concept of product life cycles


Define It

adopter
diffusion
product category
brainstorming
growth stage
product development
business analysis
innovation
product life cycle
commercialization
introductory stage
screening
concept test
maturity stage
simulated laboratory market testing
decline stage
new product
simultaneous product development
development
new product strategy
test marketing

Chapter Outline


Opening Vignette: FastCar Speeds Development Process
Chrysler is in the process of developing its FastCar system which will allow the company to use the Internet to streamline its new product development process. FastCar allows Chrysler to link the flow of information from six major information systems that until now have not been able to communicate easily. As car designers and engineers go through hundreds of variations of car models, the other arms of Chrysler can understand what is changing in real time.
How has the Internet helped Chrysler reduce the time it takes to design and develop a new car and, at the same time, dramatically reduce costs and increase flexibility? Could those processes be helpful to firms in other industries?

1         Explain the importance of developing new products and describe the six categories of new products


I.       The Importance of New Products

Supplemental Article #1: DVD Standards

Review It Question 1.1

A new product can be new-to-the-world, to the market, to the producer or seller, or to some combination of these.

A.     Categories of New Products

1.      New‑to‑the‑world products are also called discontinuous innovations. The product category itself is new.

2.      New product lines are products the firm has not offered in the past that allow it to enter an established market.

3.      Additions to existing product lines are new products that supplement a firm's established line.

4.      Improvements or revisions of existing products result in new products.

5.      Repositioned products are existing products that are targeted at new markets or market segments.

6.      Lower-priced products are products that provide similar performance to competing brands at a lower cost.

Ethics in Marketing: Less Toxins, Great Taste
Vector Tobacco Ltd. introduced a new cigarette called Omni with the slogan “reduced carcinogens, premium taste.” Omni was created to cut levels of chemicals that are the major cause of lung cancer in smokers. The product is made with a combination of chemicals, including palladium, which resulted in a cigarette that tastes as good as its competitors but without the number of toxins. Vector acknowledges that it has no scientific proof, however, that the cigarette is less dangerous than the average cigarette.
Is Omni a new product? If so, what category of new product does it fit into? Are Vector’s claims for Omni legal and ethical?




2         Explain the steps in the new-product development process


II.      The New Product Development Process



Transparency 10-1: New-Product Development Process

Transparency 10-2:
Idea Generation

A new product strategy links the new product development process and the objectives of the marketing department, business unit, and corporation. All of those objectives must be consistent.

B.      Idea Generation



Review It Questions 2.4 and 2.5




















Supplemental Article #2: Wrapped Peanut Butter Slices














New product ideas can come from many sources:

1.      Customers: The marketing concept suggests that customers' needs and wants should be the springboard for developing new products.

2.      Employees: Because of their involvement in and analysis of the marketplace, employees who are not in the research and development department often come up with new product ideas.

3.      A distributor is often more aware of customer needs than the manufacturer because the distributor or dealer is closer to end users.

4.      Competitors may have new products that can or should be a source of new product ideas.

5.      Research and development (R&D) may be a source of new product ideas and innovation. R&D is carried out in four ways:

a.      Basic research is scientific research aimed at discovering new technologies.
b.      Applied research attempts to find useful applications for new technologies.
c.      Product development is the process of converting  applications for new technologies into marketable products.
d.      Sometimes research and development involves product modification, cosmetic changes in products or functional product improvements.

6.      Consultant groups are available to examine a business and recommend product ideas.

A variety of approaches and techniques have been used to stimulate creative thinking and generate product ideas:

a.      Brainstorming is a process for getting a group to think of unlimited ways to vary a product or solve a problem. 
b.      Excellent new product ideas are often generated by focus groups, which are interviews usually consisting of seven to ten consumers interacting in a structured discussion.

C.      Idea Screening

Class Activity: Students asked to generate and screen new products for a small manufacturer of tennis racquets.





Transparency 10-3:
Business Analysis


Screening is the first filter in the product development process.  It eliminates ideas that are inconsistent with the organization's new product strategy or are obviously inappropriate for some other reason.

1.      Most new product ideas are rejected at this stage.

2.      Concept tests are often used to rate concept (product) alternatives. A concept test is the evaluation of a new product idea, usually before a prototype has been created.

D.     Business Analysis


Review It Question 2.2

The business analysis is the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated.
At the end of this stage, management should have a good idea of the market potential for the product.

E.      Development
Transparency 10-4:
Development























Review It Question 2.1






In the development stage of the product development process, a prototype is developed and a marketing strategy is outlined.

Costs increase dramatically as the new product idea moves into the development stage.

1.      In the early stages of development, the research and development or engineering department may develop a prototype or working model.

2.      Decisions such as packaging, branding, and labeling will be made. Preliminary promotion, price, and distribution strategies should be established.

3.      During the development stage, the technical feasibility of manufacturing the product at a reasonable cost is thoroughly examined, and the product may be modified.

4.      Laboratory tests subject the product to much more severe or critical treatment than is anticipated by end users.

5.      Many products that test well in the laboratory are next subjected to use tests, in which they are placed in consumers' homes or businesses for trial.

6.      The development process works best when all the involved areas (departments) work together rather than sequentially. This process is called parallel engineering, simultaneous engineering, or concurrent engineering.
Review It Question 2.3

F.      Test Marketing

After products and marketing programs have been developed, they are usually tested in the marketplace.





Supplemental Article #3: The Perfect Test Market?






















Transparency 10-5:  Commercialization

1.         Test marketing is a limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

2.      Selection of test market cities should ensure that they reflect market conditions in the new product's projected market area. There is no one "perfect" city that reflects the market as a whole, and selecting a test market city is a very difficult task.

3.      Costs of test marketing are very high. Some companies choose to forego this procedure altogether, especially for line extensions of well‑known brands. Test marketing can take twelve to eighteen months and cost in excess of $1 million.

4.      Many firms are looking for cheaper or faster alternatives to test marketing.

a.      Supermarket scanner testing (single-source data) keeps track of the sales response to marketing mix alternatives.
b.      Another alternative is simulated (laboratory) market tests, which usually entail showing members of the target market advertising for a variety of products. Purchase behavior, in a mock or real store, is then monitored.

5.      One drawback of test marketing is that the product and its marketing mix are exposed to competitors before its introduction. Competitors may sabotage the test or rush an imitation of the new product to market.

6.      Despite the problems associated with test marketing, most firms still consider it essential for new products. The high price of failure prohibits the widespread introduction of a product that might fail.




3         Explain why some products succeed and others fail 

 

Transparency 10-6:  Why New Products Fail

Review It Question 3.1
















Transparency 10-7: Success Factors

III.       Product Success and Failure

A.       Products fail for many reasons

1.       They do not offer any discernible benefit
2.       Poor match between product features and customer desires
3.       Overestimation of market size
4.       Incorrect positioning
5.       Incorrect pricing
6.       Inadequate distribution
7.       Poor promotion
8.       Inferior product

B.        Degrees of failure

1.       Absolute failure occurs when a company actually loses money.

2.       Relative failure occurs when marketing goals are not met, but the product returns a profit.

C.        The most important factor in successful new-product introduction is a good match between the product and market needs.

 



4         Discuss global issues in new-product development 


Review It Question 4.1


IV.      Global Issues in New Product Development

A.        A firm that starts with a global strategy is better able to develop products which are marketable worldwide.

B.         Some global marketers design their products to meet regulations and other key requirements in their major markets and then, if necessary, meet smaller markets' requirements country by country.

 





5         Explain the diffusion process through which new products are adopted


Supplemental Article #4:
The Acceptance of Hybrid Vehicles









Transparency 10-8: Categories of Adopters

Review It Question 5.2























Transparency 10-9: Product Characteristics and Rate of Adoption


Review It Question 5.1

V.     The Spread of New Products

An adopter is a consumer who is happy enough with his or her trial experience with a product to use it again.

A.     Diffusion of Innovation

1.      An innovation is a product perceived as new by a potential adopter.

                   2.      Diffusion is the process by which the adoption of an innovation spreads.

 B.     Five categories of adopters participate in the diffusion process:

1.      Innovators are eager to try new ideas and products, have higher incomes, and are better educated than noninnovators, and represent the first 2.5 percent of all those who will adopt.

2.      Early adopters represent the next 13.5 percent to adopt the product. Early adopters are much more reliant on group norms, are oriented to the local community, and tend to be opinion leaders.

3.      The early majority, the next 34 percent to adopt, collect more information and evaluate more brands than do early adopters. They rely on friends, neighbors, and opinion leaders for information and norms.

4.      The late majority, the next 34 percent to adopt, do so because most of their friends have already done so. For them, adoption is the result of pressure to conform. This group is older than the others and tends to be below average in income and education.






6         Explain the concept of product life cycles


Transparency 10-10:
Product Life Cycles









Review It Question 6.1





VI     Product Life Cycles

A.      The product life cycle is a concept that provides a way to trace the stages of a product's acceptance from its introduction to its decline.

1.         The product life cycle refers to the life of the product category, which includes all brands that satisfy a particular type of need.

2.         The length of time a product category spends in any one stage of the  product life cycle may vary dramatically, from a few weeks to decades.

3.         The life cycle concept does not predict how long a product category remains in any one stage, rather, it is an analytical tool to help marketers understand where their product is, what may happen to it, and which strategies are appropriate.






 B.     Stages in the Product Life Cycle

1.         Introductory Stage

a.      The introductory stage of the product life cycle represents the full‑scale launch of a new product into the marketplace.
b.      The introductory stage is typified by a high failure rate, little competition, frequent product modification, and limited distribution
c.       The introductory stage usually has high marketing and production costs and negative profits as sales increase slowly
d.      Promotion strategy in this stage focuses on developing product awareness and informing customers of product benefits. The aim is to stimulate primary demand for the product category.
e.      Intensive personal selling to retailers and wholesalers is required.


Diet Coke moved rapidly from introduction to growth. Mountain Dew took over twenty years to take off.

There is a real benefit in being the first into a market.  This results from setting the standard in the eyes of the consumer. The benefit is lasting market share dominance even after competitors enter and the product moves into maturity.

2.      Growth Stage

a.      The growth stage of the life cycle is characterized by sales growing at an increasing rate, the entrance of competitors into the market, market consolidation, and healthy profits.
.        b.      Promotion in the growth stage emphasizes heavy brand advertising and the differences between brands.
c.      Gaining wider distribution is a key goal in this stage.
d.      Toward the end of the growth stage, prices normally fall and profits reach their peak.
e.      Development costs should be recovered by the end of the growth stage when sales volume has created economies of scale.

During the growth stage, the product is offered in more sizes, flavors, and models.

3.      Maturity Stage

a.      The maturity stage of the life cycle is characterized by declining sales growth rates, markets approaching saturation, annual product changes that are more cosmetic that substantial, and a move toward the widening or extension of the product line .
b.      During the maturity stage, marginal competitors begin dropping out of the market. Heavy promotions to both the dealers and consumers are required. Prices and profits begin to fall.
c.       Emergence of "niche marketers" that target narrow, well-defined, under-served segments of a market.

Many familiar consumer products are in the maturity stage and seem to be there indefinitely. Procter & Gamble argues that there is no product life cycle and points to Ivory and Camay soaps as examples.

4.      Decline Stage

a.      The decline stage is signaled by a long‑run drop in sales.
b.      The rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted.
c.      Falling demand forces many competitors out of the market, often leaving a few small specialty firms manufacturing the product.





C.      Implications for Marketing Management

Transparency 10-11: Marketing Strategies for PLC
Transparency 10-12:
Diffusion Process and PLC Curve



1.         Strategies used by marketing managers to prevent products from slipping into the decline stage include

a.          Promoting more frequent use of the product by current customers
b.          Finding new target markets for the product
c.          Finding new uses for the product
d.          Pricing the product below the market
e.          Developing new distribution channels
f.           Adding new ingredients or deleting old ingredients
g.          Making a dramatic new guarantee