Each product will have a life cycle, although its exact shape and length is not known...

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Finance

Each product will have a life cycle, although its exact shapeand length is not known in advance. Briefly explain each phase ofthe product life cycle. What is competition-based pricing?Distinguish between Market-Skimming Pricing and Market PenetrationPricing. Briefly describe the steps in the new product developmentprocess.

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Product life cycle The product life cycle has 4 very clearly defined stages each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products Introduction Stage This stage of the cycle could be the most expensive for a company launching a new product The size of the market for the product is small which means sales are low although they will be increasing On the other hand the cost of things like research and development consumer testing and the marketing needed to launch the product can be very high especially if its a competitive sector Growth Stage The growth stage is typically characterized by a strong growth in sales and profits and because the company can start to benefit from economies of scale in production the profit margins as well as the overall amount of profit will increase This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage Maturity Stage During the maturity stage the product is established and the aim for the manufacturer is now to maintain the market share they have built up This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage Decline Stage Eventually the market for a product will start to shrink and this is whats known as the decline stage This shrinkage could be due to the market See Answer

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