Photo AI
Explain the term Product Life Cycle - Leaving Cert Business - Question 3 - 2022
Question 3
Explain the term Product Life Cycle. Outline two methods firms such as Coca Cola could use to extend a Product Life Cycle.
Worked Solution & Example Answer:Explain the term Product Life Cycle - Leaving Cert Business - Question 3 - 2022
Step 1
Explain the term Product Life Cycle.
Answer
The Product Life Cycle refers to the series of stages that a product goes through from its initial introduction to the market until it ultimately declines in sales or market viability. This cycle is typically divided into five stages:
-
Introduction: This is when a product is launched, and sales begin to grow slowly as customers become aware of the product.
-
Growth: In this phase, sales start to increase rapidly as the product gains popularity, leading to more significant market penetration.
-
Maturity: At this stage, the product reaches its peak in sales. Competition intensifies, and the market becomes saturated.
-
Saturation: Sales may begin to plateau, and the product requires marketing strategies to stimulate demand.
-
Decline: Finally, sales decline due to various factors such as market changes, new technologies, or shifting consumer preferences. Businesses may need to decide whether to discontinue the product, innovate, or reinvigorate it.
Step 2
Outline two methods firms such as Coca Cola could use to extend a Product Life Cycle.
Answer
-
Reduce the Price: By lowering the price of the product, firms can attract a broader customer base. This pricing strategy can stimulate demand and potentially revive sales during the saturation or decline stages of the product life cycle.
-
Develop New Features: Firms can upgrade their products by introducing new features or variations, such as different flavors or packaging designs. For example, Coca Cola has innovated by developing new flavors and altering the design of its packaging to attract consumers' interest and extend the product's market life.