A. screening (there is nothing to screen in the first stage) B. prescreening (no such thing) C. profit estimation (this cannot happen before the idea is generated) D. idea generation is correct. E. idea screening (screening can only happen after there is an idea)
E. all of the above is the correct answer. Ideas come from a variety of sources which should all be considered.
Figure 9.3 The Product Lifecycle (PLC) pp 314 Figure 9.3 shows a typical product life cycle ‘the course of a product’s sales and profits during its lifetime. It involves five distinct stages: Product development – the company finds and develops a new product idea. Introduction – slow sales growth as the product is introduced into the market. Growth – period of rapid market acceptance and increasing profits. Maturity – slowdown in sales growth because the product has achieved acceptance, profits level off or decline. Decline – period when sales fall off and profits drop.
D. growth stage is the correct answer. The competitors would monitor the product introduction and uptake carefully, but would not be overly concerned until sales started to increase. At the growth stage competitors would try to gain or regain their market share and prevent the new product reaching maturity. Commercialisation is not strictly a stage of the PLC but part of the introduction stage.
The purpose of this, and the ongoing stages, is to reduce the number of ideas generated. The objective is to spot good ideas and drop inappropriate ones as soon as possible
Product development costs rise significantly in later stages, therefore it is financially important to remove ‘bad’ ideas early. A company wants to go ahead only with those product ideas that will turn into profitable products
The PLC concept can be applied by marketers as a useful framework for describing how products and markets perform over time
However, using the PLC concept for forecasting product performance, or for developing marketing strategies, can present some practical problems
Managers may have difficulty in identifying which stage of the PLC the product is in; pinpointing when a product moves from one stage to the next; and determining the factors that influence a product’s advancement through the various stages