With the aid of an appropriate diagram, explain the stages of a product life cycle. (marks 8)

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Q. With the aid of an appropriate diagram, explain the stages of a product life cycle. (marks:8)

A. The term ‘product’ includes consumer and industrial goods and services. Goods have a physical existence , such as washing machines and chocolate bars. Services have no physical existence, but satisfy consumer needs in other ways, for example: hairdressing, car repairs, banking etc. Product life cycle is the pattern of sales recorded by a product from launch to withdrawal from the market.

To know when to launch a new product or updating the existing one can give businesses benefits. An example can be, it allows existing models of cars to ‘soldier on’ in the market when other firms are introducing attractive new or revamped ones, which is a classic business error that has led to many failures. An awareness of the product life cycle principle can assist greatly in dealing with the problem. The life cycle of a product records the sales of that product over time.
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The product life cycle assists with planning marketing mix decisions, such as new product launches and price or promotion changes, it identifies how cash flow might depend on the cycle and lastly it recognises the need for a balanced product portfolio.

The four stages of product life cycle are, Introduction ,Growth ,Maturity/Saturation and lastly Decline

Introduction is when the product has just been launched after development and testing. In this stages the sales are usually quite slow to begin with and may increase only quite slowly. However, there are exceptions, which includes, newly launched DVD by ...

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