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Chapter_11_Study_Guide - Robert Abelson Chapter 11 Managing...

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Robert Abelson Chapter 11: Managing Products and Brands Product Life Cycle: (stages a new product goes through in the marketplace) -Introduction Stage: GAIN AWARENESS (Objective is to create awareness and stimulate trial) (Use price skimming strategy: high initial price) (Use penetration pricing : price low) -Growth Stage: STRESS DIFFERENTIATION -rapid increase in sales due to repeat purchases/ competitors usually appear in this stage/ profit usually peaks -Maturity Stage: MAINTIAN BRAND LOYALTY - slowing total industry sales/ marginal competitors leave / hold market share by product differentiation and new buyers - Decline stage: HARVESTING, DELETION - sales drop(usually due to environmental changes) Deletion : dropping product from company’s line Harvesting: company retains the product, but reduces marketing costs (TAB- by coca-cola) Dimensions of Product Life cycle: - Length : no exact time it takes for product to move between cycles - Shape of sales curve : not all products the same ( high-learning curves, low- learning, fashion, fad products) high learning example: computers, convection ovens Low learning examples: Gillette fusion razor Fashion: hosiery Product level : Class & Form High learning Low Fashion Fad Time Sales
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Class: refers to the entire product category or industry (pre-recoded music) Product form: variations within the product class(tapes, compactdiscs, mp3) The life Cycle and Consumers:
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