5.5 Product Life Cycle

Flashcards about product life cycle, obsolescence, and product versioning based on lecture notes.

What are the key stages of the product life cycle?

Launch, growth, maturity, decline

What is the product life cycle?

The period that starts with the initial product design (research and development) and ends with the withdrawal of the product from the marketplace.

What happens to competition during the maturity stage of the product life cycle?

Competition increasingly takes place over cost, and a growing share of the production takes place in low-cost locations.

What are examples of extension strategies during the decline stage of a product life cycle?

New forms of technology may be competing for their share of the market.

Define 'planned obsolescence'.

A conscious act either to ensure a continuing market or to ensure that safety factors and new technologies can be incorporated into later versions of the product.

What is meant by 'obsolescence of desirability' or 'stylistic obsolescence'?

Occurs when designers change the styling of products so customers will purchase products more frequently, due to the decrease in the perceived desirability of unfashionable items.

What is 'product versioning'?

A business practice in which a company produces different models of the same product and then charges different prices for each model.

What is a 'generation' in the context of product lifecycle?

A business practice in which a company releases a new group of products that have advanced features compared to an earlier group.

What are the four types of obsolescence?

Planned, style (fashion), functional, technological

launch

products that are at the prototype stage or have only just entered the market and are still gaining acceptance.

growth

rapid revenue growth, product succeeds in eyes of the customer

maturity

At this stage, the product has been standardized, is widely available on the market and its distribution is well established.

decline

products which are in decline.  Extension strategies may be used and new forms of technology may be competing for their share of the market.

planned obsolencese

A conscious act either to ensure a continuing market or to ensure that safety factors and new technologies can be incorporated into later versions of the product.

style obsolecence

an obsolense that occurs when fashion and style trends change over time resulting in the product no longer being desirable.

functional obsolences

Over time, products wear out and break down. If parts are no longer available, the product can no longer work in the way it originally did. Also, if a service vital to its functioning is no longer available, it can become obsolete.

technological obsolense

This usually occurs when a new product or technology supersedes the old, technology, the existing technology quickly falls out of use and is no longer used. Consumers instead opt for the newer, more efficient technology in their products.

advantages of product versoning and generations

• accelerate innovation and economic growth 

• Increased wealth from sales but increased research and development requirements.

• People like to buy new things 

• It keeps factory workers in jobs.

disadvantages of product verisoning and generation

• Manufacturers have to invest in increased research and development requirement which tends to be costly.

• ethical dilemma. society and environmental costs of waste production and discarding products 

• Planned obsolescence can be seen as a waste of natural resources and a real problem in the management of the pollution it creates.