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First, you need to make some product ingredient decisions. Which option is most appropriate for Burnin' Rock?
Use the best ingredients, as specified in the product definition.
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You chose to use the best ingredients. That was the best choice, because it is consistent with the product concept and would be more profitable in the long term.
Now you need to decide the best place to sell Burnin' Rock, based on the product positioning you are trying to achieve. Which of these options would be best for Burnin' Rock?
Place the product in health food store chains and in the organic food sections of supermarkets.
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You chose to place Burnin' Rock in health food store chains and the organic food sections of supermarkets. That was the best choice for reaching your target market.
Move each of the sliding scales below to illustrate the typical level of distribution intensity at each stage of the product life cycle. When you have moved all four sliding scales, click Submit.
- Introduction: between 1-50
- Growth: between 25-75
- Maturity: between 50-100
- Decline: between 1-50
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Correct! During the Introduction stage, the distribution intensity should be between 1 and 50.
Correct! During the Growth stage, the distribution intensity should be between 25 and 75.
Correct! During the Maturity stage, the distribution intensity should be between 50 and 100.
Correct! During the Decline stage, the distribution intensity should be between 1 and 50.
It's still early in the product introduction stage; however, sales of Burnin' Rock are not rising as quickly as you or the Vice President of Marketing had hoped. Growth is slow, and the product has not yet turned a profit. What promotional decision should you make?
Spend more on aggressive promotion in order to increase product sales.
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You chose to spend more on promotion. That was one of the best choices. It is risky, but still appropriate. Slow growth and no profits are normal at the very beginning of the product life cycle, and promotion spending must be relatively high in the introduction stage of a new product in order to make customers aware of the product and get them to buy it.
Burnin' Rock sales are growing strongly, exceeding expectations and reaching $8 million in the first year. During this period the product lost $1.23 million. You consider the product to now be in the growth stage.
You need to decide how much to spend over year two on future production capacity and promotion, to continue to grow the brand. What would be a reasonable figure?
$6 million
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You chose to spend $6 million -- three-quarters of the product's first-year sales earnings -- on future production capacity and promotion. That was the best choice. Heavy investment is usually appropriate in the growth stage of a successful product.
By the end of the first year on the market, competitors are starting to enter the market. You consider the product to now be in the growth stage.
You realize that your product strategies need to change as Burnin' Rock progresses through the product life cycle.
Of the following, which two strategies would be most appropriate in this stage of the product life cycle?
Shift some advertising from building product awareness to building product loyalty and product purchase.
Enter new market segments and add new distribution channels.
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When asked to identify which two strategies would be most appropriate for Burnin' Rock in the growth stage of the product life cycle, you correctly identified both strategies. These were the best choices.
At what stage of the product life cycle do sales peak? At what stage does profit peak? At what stage does competition peak?
Indicate when sales, profit, and competition peak by labeling each folder with the correct stage of the product life cycle. Each label may be used more than once.
SALES: Maturity
PROFIT: Growth
COMPETITION: Maturity
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Correct! Sales peaks during the Maturity stage.
Correct! Profit peaks during the Growth stage.
Correct! Competition peaks during the Maturity stage.
Now that the product is in the growth stage of the product life cycle, how should you adjust the amount of your budget for promotion, compared to the launch year?
Increase promotion spending.
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You chose to increase promotion spending in response to growth. That was one of the best choices. Although the focus of some promotion should shift from product awareness to product loyalty or product adoption, it continues to be important to spend considerable money on promotion so that the company can capture a dominant position in the market.
Now that the product is in the growth stage of the product life cycle, the Vice President of Marketing checks in with you and wants to know if you plan to adjust prices. Which of the options is best for Burnin' Rock?
Keep prices the same.
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You chose to keep prices the same in response to growth. That was one of the best choices. As new competitors enter the market, maintaining the same price or decreasing it slightly are valid strategies in the growth stage.
It has now been 3 years since Burnin' Rock was launched, and after a shaky start in the introduction stage, the product appears to be entering the maturity stage of the product life cycle. Product sales remain strong, but many competitors have entered the market. The Vice President of Marketing stops by your office and asks how you plan to sustain Burnin' Rock's market growth.
Continue to grow sales by finding new users and new market segments for Burnin' Rock.
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You chose to continue growth by finding new users and new market segments for Burnin' Rock. That was the best choice. One strategy in the maturity stage of the product life cycle is modifying the market by finding new users, new market segments, and/or identifying new uses of the product.
It's five years later, and sales have reached a plateau. Burnin' Rock is clearly in the maturity stage. What should you do to increase sales?
Introduce new flavors of Burnin' Rock.
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You chose to create new flavors of Burnin' Rock. That was the best choice to increase sales.
Although it has been a profitable product for the company for several years, it has become obvious that Burnin' Rock is now in the decline stage of the product life cycle. Of the following options, which would be the best strategy for this stage?
Keep Burnin' Rock on the market, but modify the marketing mix to maintain profitability.
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You chose to maintain Burnin' Rock while modifying the marketing mix. That was the best choice to try to revitalize this declining brand.
