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Draft and label a product life cycle - Leaving Cert Business - Question A - 2018
Question A
Draft and label a product life cycle. Describe one characteristic of each stage of the product life cycle with reference to a product of your choice.
Worked Solution & Example Answer:Draft and label a product life cycle - Leaving Cert Business - Question A - 2018
Step 1
Draft and label a product life cycle.
Answer
The product life cycle can be visually represented as a graph where the x-axis denotes time and the y-axis denotes sales. The life cycle consists of the following stages:
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Introduction: This stage involves the launch of the product into the market. Sales are low as the product is introduced, and heavy expenditures are common due to advertising and promotional activities.
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Growth: As the product gains market acceptance, sales begin to grow rapidly. Companies invest in production and distribution to meet demand, which leads to increased profits.
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Maturity: This stage is characterized by peak sales, but the market becomes saturated. Competition is fierce, leading to reduced prices and profits. Companies focus on brand loyalty and expansion into new markets.
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Saturation: Sales growth slows, and sometimes begins to decline. Companies need to maintain their market share through advertising and promotions. Margin pressures become evident, leading to a reassessment of strategy.
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Decline: In this final stage, sales decrease significantly. Companies may decide to discontinue the product or attempt to revitalize it by targeting new markets or adjusting pricing strategies.
(Insert figure reference here)
Step 2
Describe one characteristic of each stage of the product life cycle with reference to a product of your choice.
Answer
For this response, I will reference the smartphone industry, specifically the launch of the Apple iPhone.
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Introduction: During the introduction of the iPhone, there was significant marketing investment to generate awareness and promote the innovative features of the product. The company focused on creating excitement and educating potential consumers about the new touchscreen capabilities.
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Growth: As consumers started adopting the iPhone, sales rapidly increased. Apple invested in expanding production capacity and enhancing distribution channels, successfully meeting the growing demand. The company also began to expand its market reach internationally.
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Maturity: The iPhone reached maturity as it became a household name, with sales peaking. Competitors entered the market with similar products. Apple concentrated on product differentiation through features like camera improvements and software updates to retain customer loyalty.
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Saturation: Sales began to plateau as most consumers who wanted a smartphone already owned one. Apple responded with marketing strategies aimed at showcasing new features and targeting emerging markets to stimulate demand.
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Decline: Eventually, some models of the iPhone started to see a decline in sales as newer models were introduced. Apple opted to offer trade-in programs and discounts to keep older models appealing, while simultaneously emphasizing new innovations in their product lines.