ITPEC FE Morning April 2023 Question 67

Topic: Business Strategy Management

Which of the following is a characteristic of the maturity stage in the product life cycle?

Explanation

Differentiation, segmentation, new models and cost reduction under intensifying competition — these mark the maturity stage of the product life cycle.

Each stage of the product life cycle has its own market conditions and priorities:

StageMarketPriority
IntroductionDemand is partialCultivate demand, persuade specific targets
GrowthThe market understands the value, sales riseExpand the product line and channels, keep investing
MaturityDemand peaks, competition intensifiesDifferentiate, segment, add models, cut cost
DeclineDemand falls, firms withdrawStay as a strong player or move to other markets

Option (b) names the maturity-stage signs: differentiation and segmentation become evident, competition intensifies, and new models and cost reduction become the priority.

Answer (b)

Why not others:

  • •(a) — falling demand and competitors withdrawing describe the decline stage
  • •(c) — partial demand and the need to cultivate new demand by persuading specific targets describe the introduction stage
  • •(d) — the market coming to understand the product, expanding lines and channels, and rising sales that still need investment describe the growth stage

Key rule: Introduction creates awareness, growth expands lines and channels, maturity fights for share through differentiation and cost, and decline decides whether to stay or withdraw.

Business Strategy Management · AI-written, may contain errors

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