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)
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)
Introduction (5 Marks)
The Product Life Cycle (PLC) refers to the progression of a product through five distinct
stages: Introduction, Growth, Maturity, Saturation, and Decline. Each stage represents
different challenges and opportunities in the market, requiring companies to adapt their
marketing strategies accordingly. Understanding the PLC helps businesses manage product
development, marketing efforts, and overall profitability more effectively.
1. Introduction Stage (8 Marks)
Characteristics:
Product is launched in the market.
Sales are low; profits are minimal or negative due to high launch and promotion costs.
High risk and uncertainty.
Customer awareness is limited.
Marketing Strategies:
Heavy promotional campaigns to build awareness and educate consumers.
Skimming or penetration pricing strategies depending on market goals.
Focus on early adopters and innovators.
Selective distribution to control product availability and image.
Brand positioning is crucial.
2. Growth Stage (8 Marks)
Characteristics:
Sales increase rapidly.
Profitability begins to rise as economies of scale are achieved.
Competitors enter the market.
Customers become more familiar with the product.
Marketing Strategies:
Increase distribution channels and production capacity.
Aggressive advertising to differentiate from competitors.
Product improvements based on customer feedback.
Competitive pricing to increase market share.
Build brand loyalty through enhanced customer service.
3. Maturity Stage (8 Marks)
Characteristics:
Sales peak and stabilize.
Market becomes saturated.
Profit margins may begin to shrink due to price wars.
High competition.
Marketing Strategies:
Product diversification or feature enhancements to stand out.
Promotional pricing or bundling.
Loyalty programs and customer retention campaigns.
Rebranding or repositioning may be considered.
Focus on cost-cutting and operational efficiency.
4. Saturation Stage (6 Marks)
Characteristics:
Sales plateau; few new buyers.
Market is fully saturated.
Product differentiation becomes harder.
Marketing Strategies:
Niche marketing to find smaller, specific customer segments.
Repackaging or minor updates to rejuvenate interest.
Explore new markets (e.g., international expansion).
Maximize profits from remaining loyal customers.
5. Decline Stage (6 Marks)
Characteristics:
Sales and profits decline.
Product may become obsolete due to new technology or shifting consumer preferences.
Reduced customer interest.
Marketing Strategies:
Harvesting strategy: Reduce costs and continue selling to a niche.
Discontinue or divest the product if unprofitable.
Sell off or license product to another company.
Minimal promotion and support unless pursuing a niche opportunity.
Real-World Example: Apple iPod (9 Marks)
1. Introduction:
Launched in 2001, Apple introduced the iPod as a revolutionary portable music player.
Heavy promotions and integration with iTunes helped raise awareness.
2. Growth:
Rapid adoption in early 2000s.
iPod Mini, Nano, and Touch were introduced to reach broader audiences.
3. Maturity:
By mid-2000s, the iPod dominated the MP3 player market.
Apple introduced enhancements like better battery life, colors, and storage.
4. Saturation:
Smartphones, especially the iPhone, started replacing standalone MP3 players.
iPod sales plateaued; innovations slowed.
5. Decline:
Demand dropped sharply as consumers shifted to smartphones.
Apple officially discontinued the iPod Touch in 2022.
Conclusion (5 Marks)
The Product Life Cycle offers a valuable framework for businesses to strategically manage their
products from launch to retirement. By adapting marketing strategies at each stage, companies
can maximize profitability and extend the product's market life. The case of the Apple iPod
clearly illustrates how a product evolves through all PLC stages, from groundbreaking
innovation to eventual decline.
Total: 50 Marks
Let me know if you'd like this formatted for an academic paper or presentation.
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)
Certainly! Here's a comprehensive 50-mark essay-style response discussing strategies businesses
use to manage demand and supply imbalances, including real-world examples for each.
Managing Demand and Supply Imbalances
(50 Marks)
In the dynamic world of business, fluctuations in demand and supply are inevitable. These
imbalances can be caused by seasonal changes, economic cycles, unforeseen disruptions (such as
pandemics), or changes in consumer behavior. Managing these fluctuations effectively is crucial
for maintaining profitability, customer satisfaction, and operational efficiency. Businesses
employ a variety of strategies to align supply with demand, which can be categorized under
demand management and supply management strategies.
I. Demand Management Strategies
These strategies aim to influence or adjust customer demand to better match available supply.
1. Dynamic Pricing
Description: Prices are adjusted in real-time based on demand levels. Higher prices during peak
demand help reduce excessive demand, while lower prices during off-peak periods encourage
consumption.
Example:
Uber uses dynamic pricing (surge pricing) during high-demand periods such as rush hours or
bad weather. This reduces demand temporarily and incentivizes more drivers (supply) to be
available.
Evaluation:
Dynamic pricing is effective in balancing short-term supply-demand gaps but may face backlash
if perceived as exploitative.
2. Promotions and Discounts
Description: During periods of excess supply or low demand, companies use sales promotions,
discounts, and marketing campaigns to stimulate demand.
Example:
Retailers like Amazon launch flash sales or "Prime Day" events to drive traffic and offload
excess inventory.
Evaluation:
While effective in clearing stock, excessive discounting can hurt brand value and profit margins.
3. Product Substitution
Description: Guiding customers toward alternative or similar products when the desired one is
unavailable.
Example:
Grocery delivery services like Instacart suggest substitutes when items are out of stock due to
supply issues.
Evaluation:
Enhances customer satisfaction but requires accurate inventory data and a good recommendation
system.
4. Demand Forecasting
Description: Using historical data, AI, or market trends to predict future demand and prepare
accordingly.
Example:
Walmart employs big data analytics and machine learning to forecast demand and optimize
inventory levels across its supply chain.
Evaluation:
Accurate forecasting reduces mismatch risks, but poor data quality or external shocks can limit
effectiveness.
II. Supply Management Strategies
These aim to enhance or adapt supply capacity to meet demand levels.
5. Flexible Workforce
Description: Hiring part-time, temporary, or contract workers during high-demand periods.
Example:
Retailers like Target hire seasonal staff during holidays (e.g., Christmas shopping season) to
handle increased customer volumes.
Evaluation:
Cost-effective and scalable, but may impact service quality due to less experienced workers.
6. Inventory Management
Description: Maintaining safety stock or buffer inventory to meet unexpected surges in demand.
Example:
Apple often builds up iPhone inventory in anticipation of new product launches to meet the
initial surge in demand.
Evaluation:
Provides a cushion but ties up capital and carries storage costs.
7. Outsourcing and Subcontracting
Description: Engaging third-party suppliers or manufacturers to meet excess demand or
compensate for internal capacity limits.
Example:
Nike outsources manufacturing to third-party factories globally, allowing scalability without
owning the entire supply chain.
Evaluation:
Improves flexibility and cost-efficiency but may reduce control over quality and lead times.
8. Technology and Automation
Description: Using robotics, AI, or automated systems to enhance production and service
delivery capacity.
Example:
Amazon uses warehouse robots to speed up order fulfillment, especially during peak seasons
like Black Friday.
Evaluation:
Boosts efficiency and scalability but involves high initial investment and potential job
displacement.
9. Capacity Expansion (Short-term and Long-term)
Description: Investing in additional production lines, facilities, or equipment to increase
capacity.
Example:
Tesla has built gigafactories in multiple countries to meet growing global demand for electric
vehicles.
Evaluation:
Addresses long-term imbalances but requires significant capital and planning.
III. Hybrid Strategy: Demand-Supply Synchronization
Many firms adopt a balanced approach, synchronizing both demand and supply levers.
Example:
Airlines use yield management systems that adjust ticket prices (demand-side) while also
adjusting flight frequencies (supply-side) based on booking trends.
Conclusion
Demand and supply imbalances are inherent in business operations, but effective management
can significantly enhance competitiveness and resilience. Strategies such as dynamic pricing,
inventory management, and outsourcing offer flexibility, while robust forecasting and
automation ensure long-term sustainability. By leveraging the right mix of these strategies and
continuously monitoring market dynamics, businesses can remain agile and customer-centric in a
volatile environment.
Marks Allocation Suggestion (for educators):
Section Marks
Introduction 5
Demand Management (4 strategies + examples) 16
Supply Management (5 strategies + examples) 20
Hybrid Strategy + Conclusion 5
Structure, Clarity & Relevance 4
Total 50
Let me know if you'd like this turned into a presentation or summary notes.
