Question : The product life cycle concept helps in:
Option 1: Pricing strategy development
Option 2: Identifying target customers
Option 3: Forecasting sales and profits
Option 4: Determining distribution channels
Correct Answer: Forecasting sales and profits
Solution : The correct answer is (c) Forecasting sales and profits.
The product life cycle concept helps in forecasting sales and profits. The product life cycle describes the stages that a product goes through from its introduction to the market until its eventual decline. Each stage of the life cycle presents unique characteristics and challenges, and understanding these stages can help in forecasting future sales and profits.
By analyzing the product life cycle, companies can make informed predictions about the expected demand and performance of a product in each stage. This allows them to anticipate sales and revenue patterns, plan production and inventory levels, allocate resources effectively, and make strategic decisions regarding marketing, pricing, and investment. Understanding where a product stands in its life cycle can help companies make better sales and profit projections and adjust their strategies accordingly.
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