Page 61 - PM Integrated Workbook 2018-19
P. 61
Advanced Costing Methods
Market Maturity
development
$ Product Growth
development
Decline
Sales
Profit
Time
9.1 Costs associated with each stage
Pre-production/Product development stage
– A high level of setup costs will be incurred in this stage (pre-production
costs), including research and development (R&D), product design and
building of production facilities.
Launch/Market development stage
– Success depends upon awareness and trial of the product by consumers,
so this stage is likely to be accompanied by extensive marketing and
promotion costs.
– Production costs per unit will be extremely high due to the low volumes
involved.
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