Principles of marketing/PMKT102/Value proposition lifecycle/Quiz 1

Product life-cycle quiz

Indicate whether the following statements are true or false:

• Managers must find new products to replace those that are in the declining stage of the product life cycle (PLC) and learn how to manage products as they move through each of the five (5) stages.
  • True
    • Correct. The marketer must consider how to optimally position and market his/her product(s) through the five stages of the PLC: (1) Product Development; (2) Introduction; (3) Growth; (4) Maturity; and (5) Decline.
  • False
    • Incorrect. If the marketing manager fails to implement effective marketing and sales / promotion tactics throughout the product life cycle, an advantageous opening can be created for direct competition and alternate / substitute products and services.
• Once a product or service is positioned, it stays that way throughout its product life cycle.
  • True
    • Incorrect. In marketing, nothing is static or constant. Marketers must be on the lookout for opportunities and threats to their products, and make adjustments and modifications to their marketing activities, so their products can successfully compete in the marketplace.
  • False
    • Correct. Products and brands are constantly being re-positioned as a result of changes in competitive and market situations. For example, in the introduction phase, a product may be positioned by application (i.e., Gatorade is for after exercising), but in the Maturity stage, it may be positioned against direct competitors.
• As part of a supply chain strategy, outsourcing has clear advantages over local sourcing.
  • True
    • Incorrect. In general, companies outsource to obtain cost advantages, as the prevailing wage rates and cost of living and benefits are far lower than in the home country. For example, Joe Fresh and many clothing manufacturers outsourced their garment production to Bangladesh, so they could produce low-cost clothing. However, while wages were low (and worker's benefits nonexistent), the 12+ hour working days for contractors / employees produced a corporate social responsibility nightmare - made worse, when a multi-storied building collapsed in Dhaka. What started out as a way to cut costs, turned into an expensive, reputation drubbing nightmare - for Joe Fresh and many of the companies outsourcing their product lines in Bangladesh.
  • False
    • Correct. In marketing, as in life, there are always tradeoffs. Nothing is black and white, or etched in stone. A manufacturer may outsource production to China, but then have concerns about shipping / transportation costs, product quality and timeliness to local markets, or even the outsourcing company stealing its intellectual property. Outsourcing decisions must be weighed carefully, and evaluated over time, to see if it makes sense throughout the product life cycle stages.