Use Extended Examples to Compare and Contrast the Characteristics of a Growing and a Mature Product Market. Discuss How Different Product Market Phases Affect a Company's Cost Recovery
Use extended examples to compare and contrast the characteristics of a growing and a mature product market. Discuss how different product market phases affect a company’s cost recovery. In order to answer this question I will try to give a brief explanation of such business concepts as product life cycle and its stages which are development and research, introduction, growth, maturity, saturation and decline. Also I will discuss how some of these phases can affect company’s cost recovery. Each company nowadays is finding ways to make a product by which their customers will be satisfied and happy. Each product has its life cycle and it progresses through the sequence of stages. This sequence is known as product life cycle (M.Surridge, A. Gillespie, 2004). First stage is the development and research, during this stage main idea is to test and develop product (M.Surridge, A. Gillespie, 2004). For chemical industries this stage of product life cycle is usually one of the most important and difficult stages, because in this phase their product is tested many times in order to be able to put this product on the sale. Sometimes such products can’t get beyond this phase. The second stage is introduction where the product is introduced to the market and put on sale (M.Surridge, A. Gillespie, 2004). In this stage vast majority of companies are unlikely to cover initial cost of this product, because the distribution and promotion costs are likely to be too high. In this stage the aim of firm is to increase brand loyalty and try to increase demand of the customers. The third stage is growth. If product has reached this phase it means that public awareness has increased and sales started to rise significantly (M.Surridge, A. Gillespie, 2004). Distributors will accept this product much easier because they will be confident in of sales. Also in this stage company starting to earn profit and covering the initial cost of this product. Lastly in this stage firm
Bibliography: “Product Life cycle management”, Retrieved 03.03.2009, 2009, from http://en.wikipedia.org/wiki/Product_life_cycle_management “Product Life Cycle”, retrieved 03.03.2009, 2009, from http://www.netmba.com/marketing/product/lifecycle/ “The Product Life Cycle”, Retrieved 03.03.2009, 2009, from http://www.bizhelp24.com/small-business-portal/guarantee-your-sales-growth-8.html “Product Life Cycle”, retrieved 03.03.2009, 2009, from http://www.projectalevel.co.uk/business/lifecycle.htm “Product Life Cycle graph” , retrieved 03.03.2009,2009 from http://www.fao.org/docrep/V4450E/V4450E03.gif M. Surridge, A. Gillespie (2004). Business Studies, Hodder Arnold