Question

How does the stage of a product’s life cycle affect price? Give some examples.

B. The U.S. Postal Service regularly raises the price of a first-class stamp but continues to operate in the red year after year. Discuss whether you think that uniform delivered pricing is the best choice for first-class mail?

Answer 1

Ans 1: the four stages of the product life cycle are: introduction, growth, maturity, and decline. The introduction phase is where there aren’t many profits or sales because the business has just started. The growth phase is when sales continue to rise and competitors begin to notice them enter the market. In the maturing phase, sales usually peak. Profits continue to decline as competition intensifies. In the decline stage, sales and profits decrease, sometimes rapidly. This product life cycle impacts marketing strategy because depending on how popular the product is, the cost of marketing can be high or low. In the introduction phase, the marketing cost is usually heavy because businesses want to reach out to more people.

Ans 2: I believe that it is priced unfairly. Though many of us that have this opinion take advantage of the prices. A person who ships something large compared to a Christmas card or something pays the same price, which is ridiculous because of the effort it takes to deliver big packages. In general, it would seem more lucrative for the USPS to use zone pricing, but the logistical costs (and hassles) of doing so would probably offset any gains made increasing prices for farther destinations