Question 33

The Product Life Cycle is a very important tool for businesses to use. It must however be used in addition to other tools to study the market.

PLP has just introduced a new product onto the market. They are going to supply personalised fileofaxes to businesses for their customers. They see this as their way forward and have studied their competitors finding that no other competitors in the line of manufacturing and supply of promotional goods to companies are distributing this kind of merchandise. This could be the product that they need to gain market share.

PLP have decided to keep some of their old range as there are still customers who are remaining loyal to them. The management team have also decided that it may be dangerous for them to put all of their eggs in one basket.

The company also realises that it needs to fund the new product with existing sales even if they are in the decline stage, as there are still sales from loyal customers.

Questions

1. Assume that PLP Ltd has a certain amount of success with its new product (the personalised fileofaxes) and has successfully passed through the development stage

of the product life cycle. Discuss the implications that may develop for the company in the

next stages of introduction and growth. (14 marks)

2. From the information given in the case study it is obvious that many of the products on offer at the moment within the portfolio of PLP Ltd are in the decline stage. Explain how

this may have happened and what decisions should be taken at this stage, also detailing

why the company would be in a better position in the maturity stage to fund new product development. (18 marks)