Product Life Cycle - Introduction

The product life cycle shows the different stages that a product passes through and sales that can be expected at each stage

• True
• False

An established product which is bringing in revenue is a comment about which stage of the Product Life Cycle?

• Decline
• Maturity
• Introduction
• Growth

Which of these comments is most suitable for Growth?

• Heavy investment but no sales
• Sales are likely to be low as the product is new to the market
• Revenue is increasing as the product gains popularity
• Likely to be characterised as a dog in the Boston Matrix

What happens to the cash flow of a business at the growth stage of the product life cycle?

• The cash flow should become more positive
• Cash flow is likely to be negative because money has to be spent on research and development
• Sales will fall and cash flow will drop
• There may be a need to spend money re-promoting the product. As a result, cash flow may begin to fall.

Costs are incurred e.g. building new production lines, promotion and distribution costs. Likely the product will still not be profitable. The length of this stage will vary.

• Maturity
• Growth
• Introduction
• Decline

Which one is NOT a stage in the PLC?

• maturity

• decline

• growth

• development

Which stage has rapid sales?

• introduction

• maturity

• decline

• growth

Which stage has lots of competitors?

• growth

• maturity

• introduction

• decline

In this stage:

•Low sales

•High cost per customer acquired

•Negative profits

•Innovators are targeted

•Little competition

• Product development

• Introduction

• Growth

• Maturity

• Decline

Which one of the following is a benefit of new product development?

• It is cheaper to develop a new products
• The latest technology can be a feature of the new product
• Customers will always prefer newly developed products