Product Life Cycle

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

• True
• False

What is happening at point F on the Product Life Cycle?

• Introduction
• Decline
• Maturity
• Growth

Which of these are extension strategies of a product?

• Cut price
• Modify the product
• All of these
• Special Offers

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

Firms with a technically superior good may well engage in price skimming. This comment could apply to which stage of the Product Life Cycle?

• Introduction
• Growth
• Decline
• Maturity

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

An example of the Introduction phase is when the First iPhone was released by Apple

• True

• False

What is the 3rd stage of the product life cycle?

• Maturity - product sales start to slow down

• Decline - product sales decrease

• Growth - product sales increase

• Introduction - new product release