ACCA Applied Knowledge · Business and Technology · Competitive factors
In the product life cycle model, which stage is typically characterised by slow sales growth, high promotional spending and little or no profit?
The introduction stage is characterised by slow sales growth, heavy promotional spending and little or no profit. Customers are not yet aware of the product and costs of launching it are high, whereas profits only start to emerge in the growth stage.
- AIntroductionCorrect
- BGrowth
- CMaturity
- DDecline
Explanation
At introduction, awareness is low, so sales build slowly while heavy spending on promotion and distribution means profits are negligible or negative. Growth is when sales rise quickly and profits begin to emerge, so it is not the answer.
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