A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle.
Answers
A company is generally unable to take advantage of economies of scale during the "Introduction" phase of the product life cycle.
Definition: The introduction phase is the first step in the product life cycle. The highlighting factor of this phase is that the product is new in the market, the sale is slow and the company has to spend heavily on advertising to make it more attractive to give it more push.
Description: The introduction phase is the first step in the product life cycle where a company tries to create awareness about the product or service in the market where there is little or no competition. Once the company promotes enough of the product through propaganda or branding, it can see pricing, as well as other aspects like distribution. To achieve market share, the price of a product in the introduction phase is very important. The popular pricing strategy followed by most companies is the Scheming Price Strategy. In this pricing strategy, a company usually costs a lot of value to customers, who are willing to buy the product. Price scanning is common, particularly when mobile phones are launched with new and improved features. Companies with established brand names ensure that the new product has some features which are unique and the owners feel proud to be the owner of that mobile phone. Some examples of unique features are: Mobile Charging, finger print scanner for unlocking the phone, etc. Even the companies that adopt the product to launch are also fast sales. For example, when Google launched the Nexus Series 6, it launched this mobile via e-shopping platform with a price tag of Rs 44,000. The phone had sophisticated glasses that supported high value tags.