Starter HOW CAN ACRISP MANUFACTURER DIFFERENTIATE ITS PRODUCTS FROM ITS COMPETITORS?

Learning objectives Understand the different stages of the product life cycle Appreciate what is meant by an extension strategy Understand the link between the cash-flow and the product life cycle

Success criteria Match up statements with the appropriate stage of the PLC. Read the description of each extension strategy and think of a real example to write in the second column Complete case study on product life cycle

Product life cycle The stages through which a product passes form its development to being withdrawn from sale; the phases are research and development, launching the product, growth, maturity, saturation and decline.

A Human Being Life Cycle Conception Birth Childhood and Adolescences Mature adult Old age Death A Product Life Cycle Research and development Launch Growth Maturity Decline saturation

Open in Active Business SALESCOSTSCASHFLOW

TASK 1. Draw a product life cycle on A3 paper and explain what happens at each stage – link to sales, costs and cash-flow. 2. Identify on your diagram at what stage of the product life cycle the following products are: ◦ DVD player ◦ Digital radio ◦ Video recorders ◦ Kellogs corn flakes ◦ Ipad ◦ Cornflakes ◦ MP4 ◦ An any others you are familiar with

Activity 1: Worksheet 1 match up the statements with the appropriate stage of the PLC.

Can you think of different ideas for how a product may stop declining ?

Activity 2: Worksheet 2 Read the description of each extension strategy and think of a real example to write in the second column.

Cash flow and the product life cycle What is cash flow? The movement of money into and out of a business. What is the main way money comes into the business? When sales are made When does money leave the business? When costs are being paid such as suppliers or workers Cash-flow for a product changes over the product life cycle.

Knowledge check