Page 171 - Cambridge IGCSE Business Studies

12: Marketing mix: product and price

ACTIVITY 12.3

Using newspapers, magazines, internet or television, or your own experience as a consumer, identify one product for each
stage of the product life cycle.
Draw a product life cycle diagram and enter the products on the diagram at their life cycle stage and explain why you
believe these products to be at the stage of the life cycle you have identified.

1 Do you think that the products which you have identified as being in the introduction stage will be a success? Justify
your answer.
2 Why has the product you have identified as in the decline stage become less popular with consumers?

Extension strategies
KEY TERM
The maturity stage is the most profitable stage of a product’s life cycle. A business

Extension strategies: marketing will want to keep the product in this stage for as long as possible. They try to do this
activities to extend the maturity by using extension strategies.
stage of a product. Extension strategies include:
■ Finding new markets for the product – owners/managers will look to see if there
are other markets for their product, perhaps entering foreign markets.
■ Finding new uses for the product – the research and development team might look
to see if the product can be used for something other than what it was originally
intended for, for example a fizzy drink which is promoted as having benefits as a
sports drink.
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Extension strategies are not just ■ Adapting the product or the packaging to improve its appeal to consumers – very
another promotional technique. often the product does not change but the packaging is redesigned by the business

They are specifically aimed at to give it a ‘fresh’ and more up-to-date appeal.
prolonging the life of the product, ■ Increased advertising and other promotional activities – the marketing function
for example by finding new uses
looks at other ways of promoting the product to perhaps appeal to a new market,
or new markets for the product.
or to remind the existing market that the product is still available.

Sales

Time

Figure 12.5 Diagram of extension strategies

How the product life cycle influences marketing decisions

Each stage of the product life cycle may require a different marketing mix.
For example advertising and other promotional activity is likely to be a lot higher
when a product is being introduced into the market than when it is entering the
decline stage.

Th e influence that different stages of the product life cycle might have on marketing

decisions about product, pricing, promotion and place are shown in Table 12.2.