Please enable JavaScript.
Coggle requires JavaScript to display documents.
Area 4 - Part 2 - Coggle Diagram
Area 4 - Part 2
4.7 The Product Lifecycle: The product life cycle shows the stages a product goes through from when it's first launched until it's no longer sold. It helps businesses understand how to manage and market a product at each stage. The stages/phases of product life cycle are: Development, Introduction, Growth, Maturity and Decline. 
1. Development: In this stage there will be no sales for the product as it is still in production. The costs will be high so the business will be making a loss at this stage.
2. Introduction: In this stage, the product is launched onto the market. There will be a few sales as the product begins to enter the market. Costs still high as the business must heavily promote the product to develop awareness of it . Profit is often negative due to high costs.
3. Growth: In this stage, sales will start to rise more rapidly after a successful launch as customers become more familiar with the product. As sales start to rise, profit starts to increase. The business keeps promoting.
4. Maturity: In this stage, sales will reach their highest. This is the most profitable stage. However, growth in sales will start to slow down as more competitors enter the market.
5. Decline: In this stage sales decrease as the product becomes less popular or outdated may be due to other competitors entering the market. If this continues, the business may decide to withdraw the product.
4.8 The Product Lifecycle and extension strategies: Extension strategies are used by businesses when their sales and profit drop towards the end of the maturity stage. This will be to extend the life of their product to stop further decline.
What are Extension Strategies for The Product Lifecycle? The business can choose the follow strategies to extend the life of a product: Advertising, change the price of the product, Adding value to the product (improving the specification of an existing product) e.g. more extra feature), Exploration of new markets (e.g. selling in different locations or target market), Change the packaging of the product (giving it a newer and more appealing look). Each of these strategies has benefits and disadvantages. YOU SHOULD KNOW THEM.
4.6 How to sell the good or service to the consumer: Many businesses sell their good/service to the consumers via the following two methods or channels: Physical and digital
A Physical method: this happens in physical shops or at events/markets. Example: shops or face-to-face selling. Advantages: - Build brand image – more visible to consumers. - Consumers get to see the product/service before purchasing. - No extra costs for postage and packaging. Disadvantages: - Limited to opening hours. - Cost of setting up a shop such as fixed costs i.e. rent and utilities. - Additional costs for employees and advertising.
-
4.5 Public Relations (PR): focuses on maintaining a positive image for a business through press release., building relationships with local communities or even engaging influencers.
- Product placement: this is when a business products are strategically placed where potential customers will see them and draw positive associations.