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Product (Product Life Cycle (Launch (Product promoted heavily …
Product
Product Life Cycle
- Product promoted heavily
- High initial prices, to cover promotion costs
- Penetration pricing
- Sales revenue goes up how ever still need to pay off original pricing.
- Competition may be limited (if it's an innovative product)
- Sales grow faster (new customers, + repeat customers)
- Competitors may be attracted to the market
- Product often improved or developed
- Rising sale encourage more outlets
- R&D
- Market Research
- High costs- & there aren't any sales to cover costs yet
- Development has high failure rate- this is often due to not enough demand.
- Sales reach a peak + profitability increase because fixed costs and development have been payed for
- Market saturation
- Competition becomes more fierce so sale might suffer
- Products doesn't appeal to customers anymore, sales fall and profits rapidly decrease.
- If sales carry on falling product withdrawal or sold to another company
- On the other hand products may stay profitable if promotion costs are reduced enough
Extension strategies: trying to prolong the life of a product by changing the marketing mix.
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