6.1.2
Product Decisions
The Product Life Cycle
The Product Life Cycle
The product life cycle is the series of stages that a product goes through over its lifetime. Not all products last forever. They start somewhere and most products and services experience a fall in sales after a certain period of time. The stages of the product life cycle are:


Research and development
Research and development
- Research and development is the stage before a product has actually been made.
- Businesses will invest in researching a certain area of the market and if they discover a business opportunity, they may then take the time and resources to develop a product or service that fits a gap in the market.
- A pharmaceutical company may invest into researching a certain disease to see if there is a drug that might help cure it.


Introduction
Introduction
- The introduction is the stage where a business introduces or launches the new product (or service) to the market.
- Marketing and advertising are important in this stage of the product life cycle because a business needs to find a way to let consumers know what the product is and that the product exists.


Growth
Growth
- Successful products often undergo a period of growth as more and more customers discover and buy the product.
- In the early days, just after introduction, the rate of growth tends to increase.


Maturity
Maturity
- At this stage, the number of new customers buying the product has slowed down and the market for the product can be considered mature.
- But sales of the product are still rising, just less quickly than before (they are rising at a decreasing rate).
- People grow a lot less between the ages of 13 and 18 when compared to age 1 and 6.


Saturation
Saturation
- At this stage, the sales of the product have reached its peak and no longer increase but remain steady.
- Essentially all consumers who want the product or service have bought or acquired it.


Decline
Decline
- Changes in fashion, consumer tastes/preferences, technological advances and new competition offering similar products can all mean that the demand for a product begins to fall.
The Boston Matrix
The Boston Matrix
The choice of marketing mix may depend on a product’s location in the Boston Matrix.


Types of product in the Boston Matrix
Types of product in the Boston Matrix
- A dog product has a low market share and is in a market of low growth, for example DVD and CD discs.
- A cash cow product has a high market share and is in a market of low growth, for example Apple TV products.
- A star product has a high market share and is in a market of high growth, for example new iPhone smartphones.
- A question mark product has a low market share and is in a market of high growth.


Factors influencing decisions on the marketing mix
Factors influencing decisions on the marketing mix
- The business’ marketing objectives may affect decisions made about the marketing mix.
- The target market may affect decisions made about the marketing mix.
- The presence and size of competitors may affect decisions made about the marketing mix.
- The type of product may affect decisions made about the marketing mix, for example whether the product is a convenience good.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences
1.3.2Political & Legal Change
1.3.3Economic Environment
1.3.4Social & Technological Environment
1.3.5Lifestyle & Technological Environment
1.3.6Corporate Social Responsibility
1.3.7The Competitive Environment
1.3.8Innovation
1.3.9Risk & Uncertainty
1.3.10Porter's Five Forces
1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
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