AS Business: Product life-cycle

HideShow resource information
  • Created by: Max123
  • Created on: 20-03-13 22:55
Preview of AS Business:  Product life-cycle

First 270 words of the document:

This shows the sales of a product over time.
Sales will be zero. There will be high costs per unit and there will be early discussions with retailers who will help in finalising the product packaging.
Sales will be low. There will be high costs per unit because sales are low but launch costs are high and overheads are being spread over a few units.
Pricing depends on different strategies e.g. skimming or penetration.
Sales are increasing. There will be falling costs per unit as overheads are spread over more units. Distribution may be increasing and the product may
have been modified given initial customer feedback.
Growth is slowing. Promotion may focus on highlighting differences with competitor's products and they may focus on key outlets and more
profitable outlets.
Then the product will either go into decline or an extension strategy is used.
Sales are falling. There will be lower budgets to keep costs down and there is likely to be discounts to maintain sales.
EXTENSION STRATEGIES The aim of these strategies is to prevent a decline in the products sales.
By targeting a new segment of the market: a new geographic market could be targeted e.g. China.
By increasing the usage of the product: e.g. Actimel's eat one pot a day `challenge' which encourages increased consumption.
By developing new uses for the product or widening the product range.
Special promotions or extra advertising.

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

This examines the existing position of a firm's product. This allows the firm to consider its existing position and plan what to do next and
where to direct its marketing efforts.
It considers the market share and the rate of growth of the markets in which they operate.
CASH COW: a high share of a slow-growing market. This type of product generates high profits and cash for the company because sales
are high, while the promotional cost per unit is quite low.…read more


No comments have yet been made

Similar Business resources:

See all Business resources »See all resources »