ITPEC IP October 2019 Question 83

Demand growth slows; quality improvements and style changes defend share and profit — the maturity stage of the product life cycle.

The product life cycle runs through four stages:

• •Introduction — few buyers, mostly early adopters; the aim is to make the product known
• •Growth — sales rise sharply and new competitors enter
• •Maturity — the market is saturated and demand growth slows; companies keep their share and profit by improving quality, changing styles and differentiating
• •Decline — sales and profit fall and withdrawal is considered

Answer (c)

Why not others:

• •(a) — a sudden rise in sales with newcomers entering the market is the growth stage
• •(b) — a sharp drop in sales and profit, with withdrawal under consideration, is the decline stage
• •(d) — marketing to early adopters and building brand recognition is the introduction stage

Key rule: Match the stage by the sales curve: rising slowly (introduction), rising fast (growth), flat at the peak (maturity), falling (decline); strategy follows the stage.

Business Strategy Management · AI-written, may contain errors