Complete Question:
Regarding product life cycles, good marketing managers know that:
Group of answer choices.
A) all competitors lose money during the sales decline stage.
B) they are getting longer.
C) industry sales reach their maximum during the market growth stage.
D) firms earn their biggest profits during the market introduction stage.
E) industry profits reach their maximum during the market growth stage.
Answer:
E) industry profits reach their maximum during the market growth stage.
Explanation:
A product life cycle can be defined as the stages or phases that a particular product passes through, from the period it was introduced into the market to the period when it is eventually removed from the market.
Generally, there are four (4) stages in the product-life cycle;
1. Introduction.
2. Growth.
3. Maturity.
4. Decline.
Basically, the introduction stage is the first stage of a product's life cycle, indicating that it is new in the market. Hence, this stage is typically characterized by low (slow) sales and as such the company (producer) has to invest so much in advertisements, marketing and promotional strategies (campaigns) in order to increase customer awareness.
The growth stage is where the producer begins to earn profits as a result of the acceptance of the product in the market.
Regarding product life cycles, good marketing managers know that industry profits reach their maximum during the market growth stage.
This ultimately implies that, the maximum industry profit is realized at the market growth stage of a product life cycle.
