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Problem

What are the strategic choices a firm can make in each stage of the product lifecycle?

Step-by-step solution

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Step 1/3

A product is defined as the offerings that satisfies the expectations of customers. The strategy of product of any firm deals with decision making of features, quality and total offerings. The lifecycle of a product is affected by the marketing activities.

Step 2/3

The product lifecycle confirms that the firm is involved in the product development process. There are four main stages of product lifecycle. Introductory, growth, maturity and decline stage. The strategic choices that a firm can make in every stage of the product lifecycle are as follows:

1. In the introductory stage of product lifecycle only few strategic choices can be done. Few product variations are offered in this stage of product lifecycle. Likewise, pricing of products can be high to large investments or low to establish share of market. Firms cannot afford for penetration strategy can go for strategic alliance with recognized firm for access to established channel network.

2. In the growth stage of product lifecycle, firms add some extensions and added service to main product to differentiate from competitor’s product entering market. Pricing continues at penetration level or skimming. Firms are driven to respond to new competitors to reflect new competitiveness. Channeling distribution through strategic alliance. Promotion convinces customer that the firm requires the type of product to create benefits of one specific brand versus another.

3. In maturity stage, the competition is huge and there are various kinds of services and product offerings that are served by various segments. There are not many choices for price settings and price is set by the customers and suppliers. Distribution is through as many numbers of channels as possible. Promotion deals with making customers’ aware of different brands. Firms focus on overall objective to hold share of market through communication, pricing and distribution and maximize profit aiming key segments.

4. In the decline stage there are fewer competitors. Prices are kept low or high depending upon the competitors’ number. Place can be selective distribution or through direct sales.

Step 3/3

Hence, the above strategic choices can be made by a firm during the product’s lifecycle.