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Word Count: 473
Product Life Cycle- The course of a products sales and profits over its lifetime It involves five distinct stages 1Product Development begins when the company finds and develops a new-product idea During product development sales are zero and the companys investment costs mount 2Introduction is a period of slow sales growth as the product is introduced in the market Profits are nonexistent in this stage because of the heavy expenses of product introduction 3Growth is a period of rapid market acceptance and increasing profits 4Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers Profits level off or decline because of increased marketing outlays to defend the product against competition 5Decline is the period when sales fall off and profits drop Product class gasoline powered automobiles have the longest life cycles- the sales of many product classes stay in the mature stage for a long time Product forms minivans pass through a regular history of introduction rapid growth maturity and decline Brand Ford Taurus External factors that influence pricing decisions include the nature of the market and demand competitors prices and offers and factors such as the economy reseller needs and government actions The sellers pricing freedom varies with different types of markets Ultimately the consumer decides whether the company has the right price The consumer weighs the price against the perceived values of using the product if the price exceeds the sum of the values consumers will not buy Therefore demand and consumer value perceptions set the ceiling for prices Consumers also compare a products price to the prices of competitors products As a result a company must learn the price and quality of competitors offers Many internal factors influence the companys pricing decisions including the firms marketing objectives marketing mix strategy costs and organization for pricing Common pricing objectives include survival Internal factors when setting prices Marketing objectives Marketing Mix
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