Product Life Cycle and New Product Development

These flashcards cover key concepts related to the Product Life Cycle (PLC), the stages of new product development, creativity templates, and marketing strategies.

What is the Product Life Cycle (PLC)?

The process a product goes through from when it is first introduced into the market until it declines or is removed from the market.

What are the stages of the Product Life Cycle?

Introduction, Growth, Maturity, Decline.

What characterizes the introduction phase of the PLC?

Low sales, negative profits, high costs per customer.

During which stage of the PLC do profits typically increase?

Growth stage.

What marketing strategy should be employed in the decline stage of the PLC?

Reduce expenditure and milk the brand.

What is meant by 'creativity templates' in new product development?

Replicable patterns that can be applied to existing products to generate new ideas.

What are the two sources of idea generation in the new product development process?

Internal Idea Sources and External Idea Sources.

Give an example of a crowdsourcing idea source.

MyStarbucksIdea.com.

What is one key characteristic of the maturity stage in the PLC?

High profits but costs should be lowered through production and distribution efficiencies.

What happens during the decline phase of the PLC?

Sales decline, with minimal advertising and simplification of the product line.

What does the marketing strategy focus on during the growth stage?

Maximize market share by extending channels and advertising in mass media.

What kind of advertising is highlighted during the introduction phase?

Heavy promotional budget with a focus on advertisements and personal selling.

What is the overall goal during the maturity stage?

Maximize profit and defend market share.

How does idea generation benefit from using templates?

Templates increase the originality and value of new product ideas.

What is 'displacement' in the context of creativity templates?

Removing an essential component leading to a new idea generated based on the new configuration.

What are 'attribute dependency' templates?

They create a dependency between internal variables controlled by the manufacturer and external variables.

In the context of product life cycle, what is 'milk the brand'?

To maximize short-term profits in a declining market by cutting costs and simplifying the product.