Principles of Marketing Final Exam Part 2
Short Essays
Please answer all of the 5 short essay questions below. Each essay is worth 1 point and should be
approximately 3/4 to 1 page in length. Good luck!
1. The Product Life Cycle (PLC) consists of 5 stages: Product Development,
Introduction, Growth, Maturity and Decline.
a. Explain how the profits and sales of a company change as a product goes through
the PLC and why this concept is important for marketers to understand.
The product may be only an idea, in the process of being made, or not yet for sale
during the development stage. The marketing mix is in the planning stage at this point,
so instead of implementing marketing tactics, the product maker is researching
marketing approaches and deciding which efforts the firm will use to launch the
product. This stage’s marketing mix includes techniques to raise product awareness
among potential customers through marketing campaigns and special incentives.
The second step is the introduction of the product to the market. During this stage,
there is a lot of marketing and product promotion, and the product is only available in
a few outlets and distribution channels. In this period, sales are slow to pick up. It is
more important to raise awareness than it is to make money.
Growth is the third stage. Sales take off at this point, the market is aware of the product,
other firms are attracted, profits start to flow in, and market shares begin to stabilize.
The fourth stage is maturity, in which sales begin to decelerate and eventually stabilize.
Products grow more distinct, pricing battles and sales promotions become more
regular, and a few weaker firms quit.
The fifth stage is known as decline. Sales plummet because consumers’ tastes have
shifted, and the product is no longer relevant or valuable. In this stage, price wars
persist, numerous goods are discontinued, and cost containment is the only way out for
most products.
This is a crucial idea for marketers to grasp because, when done correctly, PLC analysis
may alert a firm to the health of a product in relation to the market it serves. PLC also
forces a continual market scan and enables the corporation to take remedial action more
quickly. However, the procedure is rarely simple.
b. Give an example of how the marketing mix for a company might change as a
product goes from the introduction stage to the growth stage.
As a product moves from the introduction stage to the growth stage, the marketing mix
for the firm changes.
It’s a new brand on the market that people aren’t familiar with. During this time, sales
are often low. Marketing costs are significant at the debut phase since it takes a lot of
work to raise brand recognition. In this stage, the marketing mix focuses on several
marketing methods that aid in the establishment of a market image and the creation of
demand for the brand. An organization must have adequate distribution channels to get
the product or service to clients during the introduction phase.
When a product is approved by the market, it enters the product life cycle’s growth
stage. Increased sales, more rivals, and larger earnings define the growth stage.
Unfortunately for the company, the early stages of expansion attract competitors that
enter the market fast. During the growing stage of a product, companies may boost
promotional spending. Instead, then encouraging customers to test the product,
advertising frequently focus on the specific benefits it provides and its worth in
comparison to competing products. During the expansion stage, companies usually
start to make a profit since more units are sold and more money is made.
c. What role do opinion leaders/influencers play in new product development
acceptance?
Finally, do most new products fail or succeed and why?
Be sure to explain your thinking behind each answer. If you’d like, you may draw
a diagram to help illustrate your answer.
Opinion leaders have been defined in a variety of ways, including “someone whose
opinions are highly respected and used by respondents to assist in making decisions
across a variety of situations such as what types of clothes to wear, where to have major
household items repaired, how to discipline children, and for whom to vote in political
elections.” This individual might be a friend, clergyman, member of a social group,
relative, or someone in public life whose counsel is based on public pronouncements.
Opinion leaders have a lot to offer and may persuade consumers to buy or explore for
