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Cadbury is a confectionery company operating since 1932 - Leaving Cert Business - Question 7(A) - 2018
Question 7(A)
Cadbury is a confectionery company operating since 1932. It produces several well-known chocolate brands such as Dairy Milk, Crunchie, Flake, Milk Tray, Roses and Cr... show full transcript
Worked Solution & Example Answer:Cadbury is a confectionery company operating since 1932 - Leaving Cert Business - Question 7(A) - 2018
Step 1
Draw a product life cycle diagram and explain each stage.
Answer
The product life cycle consists of five stages: Introduction, Growth, Maturity, Saturation, and Decline.
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Introduction: In this stage, the product is launched into the market. Sales are typically low due to the costs of marketing, and profits are minimal as investments are focused on building product awareness. For Cadbury, this could be exemplified by a new chocolate brand introduction.
- Sales Curve: Initially low.
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Growth: Here, product awareness increases, leading to higher sales. The aim is to maximize market share. Cadbury might invest further in marketing to promote their brand further in this stage.
- Sales Curve: Rapidly increasing.
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Maturity: Sales peak as the product becomes commonplace in the market. Profits are maximized, but the focus now shifts to defending market share against competitors.
- Sales Curve: Peak and plateau.
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Saturation: Sales stabilize as most of the market has been reached. Cadbury must engage in planning to prevent a decline in sales through innovative strategies.
- Sales Curve: Flat.
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Decline: Often caused by competition or new products affecting sales. Cadbury may need to phase out certain products or innovate to hold market share.
- Sales Curve: Decreases.
The diagram would illustrate a curve illustrating these stages over time against sales revenue.
Step 2
Outline two methods a business could consider to extend the product life cycle.
Answer
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Product Strategies: Cadbury could introduce new flavors or variants of existing products to rekindle consumer interest. For example, offering a limited edition flavor of Dairy Milk could attract both new and loyal customers.
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Promotion Strategies: Utilizing advertising campaigns can rejuvenate the product image. Cadbury could run a marketing campaign emphasizing the brand's history or launching promotional sales to revitalize sales and consumer engagement.