Question

Define elasticity of demand and discuss the factors that affect elasticity Discuss the concept of AIDA and its relevance for marketers. Describe each stage of the product life cycle give an example for each

Answer 1

1:--Elasticity of demand:- It defines the change in demand of the product based on the price change of the product. The negative elasticity means there is a negative demand for the product on increase in price. Zero elasticity means there is no change in demand based on price change .The factors that affect elasticity are price change, competitors positioning, substitute services etc.

2:- AIDA is one foundation concept of modern marketing .Awareness, Interest,Desire and Action pyramid.This is the four fundamental block which determines the level of attention for any companies on their services and products. Attention includes customisation and location factors. Desire includes adding attraction to product and services.

3:-- Stages of product life cycle:-Introduction, growth, maturity and decline. Introduction includes newly introduce to the markets like new phones or gadgets . Growth includes rapid growth of products which increases the demand and maturity stage determines the max growth of product. Declining is the level of end of life cycle ( eg:- Nokia phone , their declined stage of 2008 time period).