Which of the following occur in the sales decline stage of the product life cycle?

Question

Multiple select question.

Strong brands can make profits.

New firms enter into the market.

Price competition becomes vigorous.

New products replace old.

Industry competition is low for dying products.

Answer 1

In the sales decline stage of the product life cycle, the following statements typically occur:

1. Strong brands can make profits. - Some established brands may still hold onto profitability due to their loyalty and recognition, even in a declining market.

2. Price competition becomes vigorous. - As sales decline and competition intensifies, firms often reduce prices to attract remaining customers, which can lead to aggressive price wars.

3. New products replace old. - Often, new products are developed and introduced to meet changing consumer preferences or technological advancements, leading to the decline of older products.

The other options typically do not occur in the decline stage:

• New firms enter into the market. - Typically, new firms are less likely to enter a declining market; instead, many exit as the market contracts.

• Industry competition is low for dying products. - In fact, competition can be high as remaining players fight over the shrinking customer base.

So the correct choices are:

• Strong brands can make profits.
• Price competition becomes vigorous.
• New products replace old.