Product Lifecycle, Marketing Communications, and Promotional Strategies
Product Lifecycle
The product lifecycle describes the stages a product goes through from introduction to decline:
- Introduction: Characterized by sluggish sales growth, few competitors, high risk, and low financial return. Strategy: Focus on innovation and quality.
- Growth: Characterized by growth in demand and improved profitability. Greater volatility of competitive enterprises. Strategy: Focus on quality, cost reduction, distribution channels, and launching new versions.
- Maturity: Slowdown in sales
Economics Key Concepts: Opportunity Cost, Needs, and Production
Topic 1: Core Economic Concepts
1. Opportunity Cost
The benefit of the next best alternative foregone.
2. Need
Something essential or very important, rather than just a desire.
3. Types of Needs
- Basic: Essential for survival.
- Secondary: Desires or wants.
- Present: Felt immediately.
- Future: Needed for later use.
- Recurrent: Needed frequently (e.g., daily).
- Occasional: Needed sometimes.
4. Good
A physical or tangible item that satisfies a human want or need.
5. Types of Goods
- Tangible: Can be touched and seen.
- Intangible:
Key Economic Principles: GDP, Inflation, and Policy Tools
Fundamental Economic Concepts
Defining Economics
Economics is a social science studying the allocation of scarce resources.
Positive vs. Normative Economics
- Positive Economics: Deals with facts and objective analysis (what is).
- Normative Economics: Involves value judgments and opinions (what ought to be).
Core Principles
- Scarcity: Resources are limited, implying that nothing is truly free.
- Purposeful Behavior: Individuals and institutions make rational decisions based on self-interest to maximize utility
Economic Agents: Consumers, Families, Companies, and Public Sector
Consumers and Families
Consumers decide which goods and services best meet their needs. Rationalization criteria influence these decisions:
- Preferences: Choices are made from two or more options with equal features and services that meet the same need.
- Level of Income: Income conditions the cost.
Consumers provide factors of production to companies in exchange for rent.
Income: The value or price paid for the use of a productive resource in a given period. Income has three sources:
From production factors:
Read MoreMarket Failures: Competition, Externalities, and Public Sector
Failure of Monopoly and Competition
Another argument that justifies public sector intervention in the economy is the warranty of competition. Markets can only allocate resources efficiently when buyers and sellers act in perfect competition. This means many suppliers and consumers produce and consume the same good, and, more importantly, none of them have special control over the price. When the market deviates from perfect competition, there is a failure in competition.
Factors Limiting Competition
Many
Read MorePublic Budget, Economic Cycles, and Fiscal Policy
The Public Budget and the Economic Cycle
The budget is related to the different phases of the economic cycle. However, the opinion on this relationship differs according to the school of economic thought.
Monetarist View
Monetarists believe that the economy has mechanisms to correct all imbalances without state intervention. Therefore, public spending should be limited as much as possible, and the budget should remain balanced annually; expenditures must match revenues.
Keynesian View
According to Keynesian
Read More