Chapter 11 Product Life Cycle Entrepreneurship & Small Business Management MaturityDecline GrowthIntroduction Growth MaturityDecline

INTRODUCTION One of two methods is often used when introducing a product – price skimming or penetration pricing. Price skimming involves charging a high price to recover costs as quickly as possible. Then the price is dropped when the product is no longer unique. Penetration pricing builds sales by charging a low initial price to keep unit costs to customers as low as possible. This approach can discourage competition. Entrepreneurship & Small Business Management

GROWTH In the growth stage, sales are increasing and unit costs are decreasing. If you skimmed, you would need to lower prices to appeal to price-conscious customers. If you were penetrating, very little price change would be necessary, but promotion costs would increase. Entrepreneurship & Small Business Management

Maturity During the maturity stage, you would need to look for new markets and possibly make product improvements to hold prices. Entrepreneurship & Small Business Management

Decline In the decline stage, you would cut prices to stimulate sales or clear inventory. Entrepreneurship & Small Business Management $3.89 $2.50