Answer:
a. Product life cycle are the various stages that a product goes through from it's introduction to the market to it's withdrawal from the market.
b. The sun box of chocolate is in the maturity stage, characterized by high competition and a high profit margin. The sales also seem to have reached a maximum with ranging sales of (115,000 to 125,000).
c.
1. Total costs: one needs to determine the the total costs that will be encountered in producing the product. The costs include; manufacturing and transportation costs.
2. Opportunity cost: compare the cost of the time you are putting in producing the Mercury bar to other alternative businesses.
3. Desired rates of return: one should estimate the amount of return they will get from the business and compare it to a desired rate of return that they wish to achieve. This determines if the endeavor is worth it.
d.
1. Re-branding: this is the act of changing a products features to improve it's feel and perception from it's competitors.
2. Price reductions: a reduction in price can go a long way in improving sales. Most people would rather go for a product that is cheaper provided they feel that the quality of the product is guaranteed.
3. Identifying new markets: new markets can be considered and targeted since they are unexplored and thus less competition.
Explanation:
a.
Product life cycle are the various stages that a product goes through from it's introduction to the market to it's withdrawal from the market. There are four major stages in a product life cycle as shown; introduction, growth, maturity and decline. There are underlying factors that determine the stage that a product is in. These stages are often used by financial manager and marketing managers to determine if a product needs more advertising, whether price adjustments are needed, expansion to new markets or even if the product needs to be withdrawn from the market.
b.
There are many stages in a product life cycle as shown above, each stage has it's own qualities as show;
1. Introduction: this is the point where the product is introduced to the market for the first time. A lot of investment in marketing and advertising is usually needed to make the product known to the potential customers. At this point, there is little demand for the product since most people are not aware of it's existence.
2. Growth: this is the stage where there is increased demand, thus production of the product increases. Increased demand usually reflects increased profits. The company usually expands to meet the market demand of the product.
3. Maturity: this is the point where a company has reached it's most profitable stage and is often characterized by a constant market share proportion since it cannot go any further. The sales and profits also range at a certain area with no significant increase or reduction.
4. Decline: this is the stage where other companies have entered the business as competitors offering lower prices than you. This causes the company's market share to start declining due to loss of some customers to the competition.
The sun box of chocolate is in the maturity stage, characterized by high competition and a high profit margin. The sales also seem to have reached a maximum with ranging sales of (115,000 to 125,000)
c.
The following factors should be considered before withdrawing the Mercury bar from the market;
1. Total costs: one needs to determine the the total costs that will be encountered in producing the product. The costs include; manufacturing and transportation costs.
2. Opportunity cost: compare the cost of the time you are putting in producing the Mercury bar to other alternative businesses.
3. Desired rates of return: one should estimate the amount of return they will get from the business and compare it to a desired rate of return that they wish to achieve. This determines if the endeavor is worth it.
d.
1. Re-branding: this is the act of changing a products features to improve it's feel and perception from it's competitors.
2. Price reductions: a reduction in price can go a long way in improving sales. Most people would rather go for a product that is cheaper provided they feel that the quality of the product is guaranteed.
3. Identifying new markets: new markets can be considered and targeted since they are unexplored and thus less competition.
