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Regal Marine - Essay Example

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Summary
The business world of the 21st century has become a competitive environment in which only the best firms survive. The majority of the new products that come into the marketplace fail within the first year. Companies have to invest a lot of money in research and development in order to stay ahead of the competition…
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Regal Marine
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Regal Marine

Download file to see previous pages... The product life cycle has four stages: introduction, growth, maturity, and decline. During the introduction stage sales are low because there are few customers buying the product (Netmba, 2011). The product needs advertising in order to attract new customers. The profits during this stage are nonexistent due to the fact that expenses are high and sales are slow. Regal Marine losses money when new boats are introduced, but eventually if the products survives and stays in the market during its entire product life cycle the firm generates a profit from the model. The maximum amounts of profits are generated during the growth stage. The growth stage of the product life cycle is considered a period of rapid market acceptance and substantial profit improvement (Kotler, 2003). Regal Marine should produce a lot of units during this stage. Investments made in advertising during this stage have a high return. The third stage of the product life cycle is the maturity stage. Competition is high during this stage which causes sales to decline (Valuebasedmanagement, 2011).The firm should lower its advertising expenses during this stage because the product is well known. The final stage, declining, is a period of downward sales and eroding profits. At the end of the declining stage the boats model is taken off the market. ...Download file to see next pagesRead More
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