Product Life Cycle & Product Portfolio
1. Fill in the ______________ words:
The theory of the product life cycle is that every product follows the same natural path through
__________, growth, ______________ and decline. If the product/service stays the same, the last
two stages are inevitable, says the theory, because of new innovations by ________________ and
changing customer ______________. Therefore ________________ strategies are needed to
prolong the profitable life span.
The _____________ Matrix also looks at the stages in a product’s life, but in relation to two
variables: market growth and market __________. The matrix is a way of assessing the prospects
of the different products within a firm’s portfolio. It helps to set priorities in marketing spending, e.g.
to cut advertising on product A and use the cash to double the spend on the ‘rising star’ product B.
2. Weaknesses.
For each weakness, identify whether it refers to the Boston Matrix (BM) or the PLC.
2.1 Is a static model, i.e. does not show changes over time.
2.2 In effect, treats all new products as problem children.
2.3 May encourage management apathy (oh, it’s in decline …)
2.4 May encourage premature marketing cutbacks on top-selling products.
2.5 Can only be ‘correct’ in hindsight, i.e. it has no predictive powers.
3. Identify the terms defined by:
3.1 The Boston stage in which low market share combines with low market growth.
3.2 The point at which a firm is producing flat out and cannot cope with extra demand.
3.3 The Boston stage where a product has a high share of a growing market.
3.4 A medium-term plan to prolong the profitable lifetime of a product.
4. Briefly explain why:
4.1 A cow is milked to help feed a problem child.
4.2 A rising star is given as many resources as a firm can afford.
4.3 It is necessary to develop new products while existing ones are in their growth stage.
4.4 Dogs may be withdrawn before their sales die completely.
4.5 ‘Buy One Get One Free’ is not an extension strategy.
A-Z Workbook 2008