PRODUCT LIFE CYCLE & BOSTON MATRIX

What are the stages of the Product Life Cycle?

The stages are Development, Introduction, Growth, Maturity, and Decline.

What occurs during the Development stage?

The product is researched and designed, and suitable ideas are tested and prototyped.

What is a characteristic of the Introduction stage in the Product Life Cycle?

Sales are likely to be slow as the product is new and unknown to most consumers.

How does cash flow typically behave during the Introduction stage?

Cash flow is usually negative due to high costs for promotion, advertising, and distribution.

What happens during the Growth stage of the Product Life Cycle?

Sales begin to increase rapidly as new customers buy the product and older customers repeat purchases.

What shift occurs in business focus during the Growth stage?

The focus shifts to building market share and increasing production.

What is characteristic of the Maturity stage?

Sales growth slows as the product reaches its peak in market penetration.

How does cash flow behave during the Maturity stage?

Cash flow is usually positive as sales revenue continues and costs are reduced.

What causes the decline in sales during the Decline stage?

Sales decline due to changing customer tastes, new technology, or the introduction of new products.

What strategies may businesses use in the Decline stage?

They may reduce prices, discontinue the product, or find new uses for the product.

What are Extension Strategies in the context of the Product Life Cycle?

Strategies such as product adjustments, promotion, lowering price, and entering new markets to prolong a product's life.

What is the purpose of the Boston Matrix?

To examine an organization's product portfolio and assess market share and growth.

What defines a 'Question Mark' in the Boston Matrix?

A product with low market share in a high growth market with potential to become a star.

What characterizes a 'Star' product?

High market share and high market growth, valuable to businesses for their profitability.

What are 'Cash Cows' in the Boston Matrix?

Products with high market share in a low growth market, generating significant positive cash flow.

What defines a 'Dog' product?

Low market share in a low growth market, with poor prospects for future sales and profits.