Question 1

Product Life Cycle Theory is useful when determining how competitors may react to your new product.

Accepted Answer

False

Question 2

The maturity stage demands that companies significantly increase their promotional budget to capture as much market share as possible.

Accepted Answer

During the maturity stage, market share is often already established, and companies focus on defending market share rather than capturing more, often leading to a stabilization or even decrease in promotional spending as they seek efficiency and differentiation.

Question 3

Because PLC theory can lead to self-fulfilling decision-making among managers, it is recommended that it be only used as a general guide.

Accepted Answer

PLC theory can be useful in predicting product life cycles and developing strategic plans, but it should not be relied on entirely as it can lead to tunnel vision and self-fulfilling decisions. It is recommended that it be used as a general guide and supplemented with other research and analysis.

Question 4

The most important advantage of PLC theory is that it accounts for several variables that impact the sales of a product.

Accepted Answer

PLC (Product Life Cycle) theory primarily focuses on the stages a product goes through in the market, rather than accounting for multiple variables affecting sales.

Question 5

Product platforms provide a common platform on which new products can be added to an existing product family.

Accepted Answer

Product platforms are designed to provide a standard foundation for new products to build upon. By sharing common components and technologies, development time and costs can be reduced, while allowing for greater flexibility and customization within the product family.

Question 6

A company can influence a product's life cycle.

Accepted Answer

A company can influence a product's life cycle through various strategies such as product updates, marketing campaigns, and pricing strategies. They can also introduce new variations of the product or discontinue it altogether.

Question 7

Which stage of the product life cycle presents a negative sales curve?&#10;A) Decline&#10;B) Growth&#10;C) Introduction&#10;D) Maturity

Accepted Answer

The decline stage of the product life cycle is characterized by a decrease in sales, which is represented by a negative curve. This can be due to a number of factors such as increased competition, saturation of the market, changing consumer preferences, or the introduction of newer and better products.

Question 8

The product lifecycle describes the sales of a product from _________ to _________.&#10;A) Introduction; Decline&#10;B) Introduction; Maturity&#10;C) Introduction; Growth&#10;D) Birth; Death

Accepted Answer

The product lifecycle model typically consists of four stages: Introduction, Growth, Maturity, and Decline. Therefore, the sales of a product start with its introduction and eventually decline as the product reaches the end of its lifecycle.

Question 9

Maximizing market share is a key objective of the _________ stage.&#10;A) Growth&#10;B) Introduction&#10;C) Decline&#10;D) Maturity

Accepted Answer

The Growth stage of the product life cycle is characterized by increasing sales and profits, and the main objective is to maximize market share. This is because gaining a larger market share during the growth stage gives the company a competitive advantage and paves the way for future success. In contrast, the Introduction stage is focused on creating awareness and generating demand, the Maturity stage is focused on maintaining market share and profitability, and the Decline stage is focused on minimizing losses and managing the product's phase-out.

Question 10

A _________ attempts to maximize or maintain profitability by reducing costs.&#10;A) Maintenance strategy&#10;B) Defensive strategy&#10;C) Innovation strategy&#10;D) Maturity-stage strategy

Accepted Answer

The answer of A _________ attempts to maximize or maintain...

Question 11

_________ represent a common foundation upon which new products (like line extensions) can be built upon.&#10;A) Platforms&#10;B) Families&#10;C) Foundations&#10;D) None of the above

Accepted Answer

The answer of _________ represent a common foundation upon which...

Question 12

Reducing costs to focus on maximizing benefits or profits before the item is discontinued is the objective of which strategy:&#10;A) Maintenance.&#10;B) Harvest.&#10;C) Growth.&#10;D) Introduction.&#10;

Accepted Answer

The answer of Reducing costs to focus on maximizing benefits...

Question 13

Product Proliferation occurs when:&#10;A) a company offers too few variations of the same product.&#10;B) a company offers too many variations of the same product.&#10;C) a company offers different product lines.&#10;D) a retailer refuses to see a company's products.

Accepted Answer

The answer of Product Proliferation occurs when:&#10;A) a company offers...

Question 14

The Product Life Cycle can be influenced by:&#10;A) external factors.&#10;B) internal factors.&#10;C) Both A and B are correct.&#10;D) None of the above are correct.

Accepted Answer

The answer of The Product Life Cycle can be influenced...

Deck 10: Life Cycle Management