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Complete the text. Replace the Russian words and phrases by the English equivalents



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Существует много факторов which can seriously affect the стратегические решения made by the firm. Многие из этих факторов are within the control of the firm. However, there are a number of factors in the внешней среде of the firm over which it has никакого прямого контроля. An external factor around which a company must развивать свою маркетинговую стратегию is the экономическая среда, which may dramatically alter the market. This is especially so во время рецессии, when disposable доходы падают sharply and спрос на многие продукты is sharply сокращается. Companies which have предприняли стратегию of marketing a highly differentiated product на незанятом рынке, at a high price, may be hard hit by falling incomes. Therefore, it is важно предвидеть и планировать for такие перемены in the economic environment.

2.5.4Text for discussion.

a. Look up the dictionary or Unit 2 Glossary for the meaning and pronunciation of the following words and word-combinations and use them to discuss the problems outlined in the text.

Product life cycle; to commence; commonplace items; high technology products; time scale; sound policy; failure rate; product awareness; penetration pricing; brand image; outlets; economies of scale; product line; repositioning; price discounting; niche markets; maturity.

b. Briefly scan the textand outline the list of major points.

c. Read the text more carefully and comment on the following items:

- the difficulty to judge which phase a product is in at present;

- the use of modification to prolong the product life cycle;

- other criticisms of the concept.

 

Product Life Cycle

This is a most important concept for the Marketing Department of any company to have in mind as part of their strategic planning process over the long term. As soon as a product enters the market it commences a life cycle, which can be measured or forecast. The life cycle will tend to be long for standard, commonplace items like soap or bread, but short in case of high technology products like computers. The concept of product life cycle is a helpful tool, in order to identify the correct strategy for each stage, the movement from one stage to another and the time scale of the whole cycle. This will permit a sound policy on the systematic introduction of new products.

 

INTRODUCTION GROWTH MATURITY DECLINE
Characteristics High failure rate; Little competition; Frequent modification Makes losses. Strategies Create product awareness; Penetration pricing; Quickly drop unsuccessful products. Characteristics More competitors; Rising sales; Possibly acquired by larger company. Strategies Promote brand image; Acquire outlets; Obtain economies of scale. Characteristics Sales increase at reduced rate; Product line widened; Pricers fall as market share id lost; Profits fall as competition grows; Marginal producers fall out.   Strategies Seek new customers by repositioning; Increase or hold market share by greater efficiency, price discounting. Characteristics Falling industry sales, product sales; Some producers abandon market; Falling profits. Strategies Reposition in niche markets; Strict cost control; ‘Run out ‘sales promotion to get rid of stocks prior to introduction of replacement.  

 

Table. 5 Characteristics and strategies of the product life cycle stages

 

Fig. 6 The product life cycle and its various stages

 

The concept of the product life cycle should not be over-emphasised. Product modification may allow a company to manipulate the product life cycle to its advantage. Product modification or a change in marketing strategy may enable a company to prolong the life cycle of a product and turn it from a potential ‘dog’ into a continuing ‘cash cow’.

 





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