In which of the following stages of product life cycle a company reduces sales promotion to take advantage of heavy consumer demand?
- Introduction
- Growth
- Maturity
- Decline
Answer (Detailed Solution Below)
Option 2 : Growth
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Product Life Cycle:
- The term product life cycle refers to the length of time a product is introduced to consumers into the market until it's removed from the shelves.
- The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline.
- This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.
- The process of strategizing ways to continuously support and maintain a product is called product life cycle management.
- Introduction Stage:
- The introduction stage shows low sales numbers as the product is being introduced in the market.
- Profit is zero or negative in this stage because of the heavy expenses of product introduction.
- Sales Promotion Strategy: Use heavy sales promotion to entice trial.
- Growth Stage:
- With proper marketing, a product can go into the growth stage.
- During the growth stage, sales rise rapidly as consumers begin to accept the product.
- The production runs become longer, and economies of scale are achieved, reducing per-unit cost, and also helping profits to increase rapidly.
- Sales Promotion Strategy: Reduce to take advantage of heavy consumer demand.
- Maturity Stage:
- During the maturity stage of the product life cycle, the sharp growth in sales begins to slow, and profits at the beginning of this stage decline.
- The most notable characteristic of this stage is the peaking of the product’s sales and profit curves.
- At the beginning of the maturity stage, sales continue to grow but at a much slower rate.
- Towards the end of this stage, sales and profits will start to fall fairly rapidly.
- This stage is characterized by severe competition as many brands enter the market.
- To combat competition, marketing costs increase substantially results in a reduction in profits.
- Sales Promotion Strategy: Increase to encourage brand switching.
For any product, it’s PLC will go to the decline stage, where the product’s sales and profits fall very quickly, and most competitors leave the market. Sales Promotion Strategy: Reduce to a minimal level.
Thus, option 2 is the correct answer.
During which stage of the product life cycle does the company attempt to maximize market share?
In the introduction stage, for example, your marketing efforts will likely be focused on building brand and product awareness, as well as establishing and connecting with a target market. Yet in the maturity stage, you'll be fighting to maintain market share.
In which stage of product life cycle growth is maximum?
During the maturity stage, competition is now the highest. Rival companies have had enough time to introduce competing and improved products, and competition for customers is usually highest. Sales levels stabilize, and a company strives to have their product exist in this maturity stage for as long as possible.
In which of the following stages of product life cycle a company reduces sales promotion to take advantage of heavy consumer demand?
For any product, it's PLC will go to the decline stage, where the product's sales and profits fall very quickly, and most competitors leave the market.
In which of the following stages of the product life cycle do profits peak Mcq?
Maturity Stage: During the maturity stage of the product life cycle, the sharp growth in sales begins to slow, and profits at the beginning of this stage decline. The most notable characteristic of this stage is the peaking of the product's sales and profit curves.