Which of the following statements is true about product life cycle?

The statement accurately describes the price skimming strategy, which is often employed during the introductory stage of the product life cycle. A high initial price is set to target early adopters who are less price-sensitive, allowing the firm to "skim" maximum revenue from the market. As the initial demand from this segment is met, or as competitors enter the market, the company systematically lowers the price to attract subsequent layers of more price-sensitive customers. This aligns with the dynamic nature of pricing strategies across the product life cycle.

A. Prices are highly dynamic and are adjusted throughout the product life cycle to respond to competition, demand, and strategic goals for each stage.
B. Price competition is typically most intense during the maturity stage, where the market is saturated and competitors fight for market share, not the decline stage.
D. Sales volume is typically at its lowest during the introductory stage and peaks during the maturity stage of the product life cycle.

1. Tanner

J.

& Raymond

M. A. (2016). Principles of Marketing. University of Minnesota Libraries Publishing. Chapter 7

Section 7.2

"The Product Life Cycle." This text explains that in the introduction stage

"A price skimming strategy involves setting a high initial price for a product

to more quickly recoup the investment related to its development and marketing... As the product moves through its life cycle

the price is gradually lowered."

2. Day

G. S. (1981). The Product Life Cycle: Analysis and Applications Issues. Journal of Marketing

45(4)

60–67. https://doi.org/10.2307/1251472. In his analysis (p. 62)

Day discusses how pricing strategies evolve

noting that the introductory phase allows for high prices (skimming) due to initial monopoly status

which are then forced down by competitive entry in the growth and maturity stages.

3. Levitt

T. (1965). Exploit the Product Life Cycle. Harvard Business Review

43(6)

81-94. This foundational article details the strategic implications of the PLC. It describes the introductory stage as a period where high pricing (skimming) can be used before competition intensifies

necessitating price reductions in later stages to maintain sales volume.