FACULTY OF COMMERCE
DEPARTMENT OF MARKETING
BMKT131: PRINCIPLES OF MARKETING 11
ASSIGNMENT 1
AUG -DEC 2025
ASSIGNMENT ONE
ANSWER EITHER
Question 1.
Explain the five stages of the Product Life Cycle (PLC) and discuss different marketing
strategies a company should use at each stage. Provide a real-world example of a product that
has gone through all these stages. (50 Marks)
Certainly! Here’s a comprehensive answer to Question 1 on the Product Life Cycle (PLC),
including the five stages, appropriate marketing strategies for each stage, and a real-world
example.
The Five Stages of the Product Life Cycle (PLC)
The Product Life Cycle (PLC) is a concept that describes the progression of a product through
different stages from its introduction to its decline. Each stage poses unique challenges and
opportunities, requiring tailored marketing strategies.
1. Introduction Stage
Description:
The product is launched into the market.
Sales are typically low, and costs are high due to development, marketing, and
distribution.
Profit is minimal or negative.
Awareness and education are key focuses.
Marketing Strategies:
Promotion: Heavy promotion to create awareness and stimulate trial (e.g., advertising,
influencers, product demos).
Pricing: Can use penetration pricing (low price to gain market share) or skimming
pricing (high price to recover R&D).
Distribution: Limited; focus on early adopters or niche markets.
Product Strategy: Basic version; emphasis on unique selling proposition (USP).
2. Growth Stage
Description:
Sales increase rapidly.
Profits start to rise as economies of scale kick in.
Market acceptance grows.
Competitors may enter the market.
Marketing Strategies:
Promotion: Build brand preference and increase market share through persuasive
advertising.
Pricing: May be reduced to attract more customers or maintained to maximize profit.
Distribution: Expanded to reach wider audiences (e.g., more retailers, online platforms).
Product Strategy: Improve features, add variations, respond to customer feedback.
3. Maturity Stage
Description:
Sales peak and growth slows.
Market becomes saturated.
High competition; price wars may begin.
Profits may decline due to increased marketing and competitive pressures.
Marketing Strategies:
Promotion: Focus on brand differentiation and customer loyalty programs.
Pricing: Competitive pricing to retain market share.
Distribution: Intensify efforts to make the product widely available.
Product Strategy: Product improvements, bundling, or repositioning.
4. Decline Stage
Description:
Sales and profits decline.
Market becomes outdated or customer preferences shift.
Company must decide whether to discontinue, harvest, or reinvent the product.
Marketing Strategies:
Promotion: Reduce marketing expenditure; only target loyal or niche customers.
Pricing: Discounting to clear inventory or maintain profitability.
Distribution: Limit to profitable channels.
Product Strategy: Phase out weak versions or sell the brand.
5. Extension Strategies (Optional but Common)
Before entering decline, companies may use extension strategies to prolong the maturity phase:
Rebranding
New uses or markets
Product updates or redesigns
Real-World Example: The iPod by Apple
Let’s take the Apple iPod as a real-world example that went through all PLC stages:
Introduction (2001)
Apple launched the iPod as a revolutionary portable music player.
High price, niche market appeal.
Heavy promotional campaigns highlighting its "1,000 songs in your pocket" value.
Growth (2002–2005)
Rapid adoption and increased sales.
Apple released newer models (Mini, Nano) with better features.
iTunes integration strengthened brand loyalty.
Maturity (2006–2010)
iPod became a household name.
Product variations saturated the market.
Marketing focused on style, storage, and music culture.
Decline (2011–2014)
Smartphones (especially the iPhone) began replacing iPods.
Sales dropped significantly.
Apple phased out most iPod models, keeping only the iPod Touch temporarily.
Discontinuation (2022)
Apple officially discontinued the iPod in May 2022.
Loyal users remain, but market relevance ended.
Conclusion
Understanding the Product Life Cycle helps businesses allocate resources effectively, adapt their
marketing strategies, and make informed decisions about product development and retirement.
Tailoring strategies to each PLC stage ensures better market performance and competitive
advantage.
Total Marks Breakdown (Example):
Definition of PLC and stages: 15 Marks
Marketing strategies per stage: 20 Marks
Real-world example: 10 Marks
Structure and clarity: 5 Marks
Total: 50 Marks
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OR
Question 2
Businesses often face fluctuations in demand and supply. Discuss different strategies companies
can use to manage demand and supply imbalances, providing a real-world example for each. (50
Marks)
Question 2: Businesses often face fluctuations in demand and supply. Discuss different
strategies companies can use to manage demand and supply imbalances, providing a real-
world example for each. (50 Marks)
Managing demand and supply imbalances is crucial for businesses to maintain operational
efficiency, customer satisfaction, and profitability. Imbalances can arise due to seasonal changes,
economic fluctuations, supply chain disruptions, or shifts in consumer behavior. Companies use
a range of demand-side and supply-side strategies to address these challenges. Below is a
discussion of key strategies, with real-world examples to illustrate each.
I. Demand-Side Strategies
These strategies focus on adjusting customer demand to better match supply.
1. Pricing Strategies
Businesses can increase or decrease prices to influence demand.
Example: Uber’s Surge Pricing
o Situation: During peak hours or in high-demand areas, Uber implements dynamic
pricing.
o Effect: Higher fares reduce demand slightly while incentivizing more drivers
(supply) to enter the market, helping restore balance.
2. Promotions and Discounts
Offering limited-time promotions or discounts can stimulate demand during off-peak periods.
Example: Airlines Offering Off-Season Discounts
o Situation: Airlines often have lower bookings in certain seasons (e.g., after
summer holidays).
o Strategy: They offer significant discounts during these times.
o Effect: This increases ticket sales and improves capacity utilization.
3. Demand Forecasting and Planning
Using data analytics to predict future demand and align production or service accordingly.
Example: Walmart’s Use of Predictive Analytics
o Situation: Walmart analyzes historical data, weather forecasts, and local events.
o Effect: Accurate forecasting allows it to stock appropriately and avoid
overstocking or understocking.
4. Product Differentiation and Diversification
Launching alternative products or services to shift demand.
Example: Starbucks Introducing Cold Beverages
o Situation: Coffee demand drops in summer.
o Strategy: Cold brews and iced drinks were introduced.
o Effect: Maintains customer interest and sales during warmer months.
II. Supply-Side Strategies
These strategies adjust or optimize supply to meet existing or expected demand.
1. Flexible Workforce
Hiring part-time or temporary workers to scale labor capacity up or down.
Example: Amazon’s Seasonal Hiring
o Situation: Demand spikes during holidays.
o Strategy: Amazon hires thousands of temporary workers.
o Effect: This allows them to fulfill a higher volume of orders efficiently.
2. Inventory Management
Building up inventory during low-demand periods to meet future high demand.
Example: Toy Manufacturers Pre-Building Inventory for Christmas
o Situation: Huge spike in demand during the Christmas season.
o Strategy: Inventory is produced months in advance.
o Effect: Ensures timely delivery and availability of products during peak sales.
3. Outsourcing and Partnerships
Collaborating with external suppliers or manufacturers to increase supply capacity.
Example: Apple Outsourcing Manufacturing to Foxconn
o Situation: To meet global demand for iPhones.
o Strategy: Apple outsources production to Foxconn.
o Effect: Scalability and flexibility in production during product launches.
4. Technology and Automation
Using automation to increase efficiency and responsiveness in the supply chain.
Example: Tesla’s Use of Robotics in Production
o Situation: Demand for electric vehicles (EVs) is growing rapidly.
o Strategy: Tesla employs automation in assembly lines.
o Effect: Increases production speed and reduces reliance on manual labor.
III. Hybrid Strategies
Many companies use a combination of demand- and supply-side strategies for better results.
Example: Zara’s Fast Fashion Model
Situation: Fashion trends change rapidly, making demand hard to predict.
Strategy:
o Demand-side: Limited stock and frequent new designs create urgency (scarcity
marketing).
o Supply-side: Agile supply chain and local manufacturing allow for quick
restocking.
Effect: Zara keeps inventory fresh and avoids overproduction.
Conclusion
Successfully managing demand and supply imbalances is a strategic necessity for businesses in a
dynamic environment. By leveraging both demand-side (pricing, promotions, forecasting) and
supply-side (flexibility, automation, outsourcing) strategies, companies can stay resilient and
responsive. Real-world examples such as Uber, Amazon, and Zara show how these strategies can
be effectively implemented in diverse industries to achieve operational and competitive
advantages.
[Total Marks: 50]
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