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The life cycle of a product depends on its market share, growth and co

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Manager
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The life cycle of a product depends on its market share, growth and co  [#permalink]

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Updated on: 28 Aug 2019, 04:53
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The life cycle of a product depends on its market share, growth and comparative performance. A product's life cycle begins with research and development, as the company attempts to recognize and fill a niche in the market. After a product has been designed according to the parameters recommended by market research, it is launched into the market, during which time it usually enjoys a certain amount of commercial success. The product's success continues to burgeon until competitors clutter the market with similar products. The market becomes saturated, the original product starts to lose its market position and sales begin to dwindle. The company must then decide whether to revive the product or to remove it from the market.

Kellogg's Nutri-Grain breakfast bar began its life cycle as an innovative product that captured a high percent of the market but eventually ran into trouble from competition. At first, the company was able to develop new flavors and packaging formats to keep the brand fresh without having to allocate new resources to production machinery or equipment. However, when other brands from Kellogg and rival manufacturers flooded the market with products with similar characteristics to Nutri-Grain, sales declined and Nutri-Grain's market share fell drastically despite the overall growing market.

Instead of pulling the Nutri-Grain brand off the shelves, those in charge of its development chose to generate an extension strategy. The strategy could have focused either on product diversification or development, and since diversification carries more risk, the company opted to alter the product to meet the market demands. In order to develop the product further, the company reconstructed the brand image based on the fundamental features that made the brand unique. Developers also redesigned the brand's packaging to highlight the target concepts which were thought to draw the most consumer attention.

Q1. The author uses the words usually and certain to emphasize that

(A) most products only enjoy a modest measure of commercial success
(B) the life cycle, as it is described in the first paragraph, is not universal
(C) one cannot predict whether a product will be successful or not
(D) companies that employ market research enjoy more success than those which do not
(E) the author's knowledge of product life cycles is limited

Q2. What can be inferred from the passage about product diversification?

A - It involves creating various versions of the same product.
B - It requires more investment than product development.
C - It does not necessitate a fundamental change in the product.
D - It is less prone to failure than product development.
E - Although riskier, it can provide greater long-term benefits than product development.

Q3. The relationship between a product's launch and the product life cycle is most similar to

A - mixing dough and making bread
B - a steering wheel and a car
C - graduating from high school and getting a Bachelor's degree
D - a production line and a factory
E - death and a fatal illness

Q4. What does the passage suggest occurs after competition clutters the market with similar products?

A - Competing products force the original product's removal from the market.
B - Sales of both the original product and the competition's product decrease.
C - Enough room remains in the market for a competitor to enter and make a profit.
D - The company's profits decrease.
E - Sales of other companies' product increase and sales of the original product decrease.

Originally posted by HardWorkBeatsAll on 31 Aug 2015, 07:08.
Last edited by SajjadAhmad on 28 Aug 2019, 04:53, edited 2 times in total.
Updated - Complete topic (306).
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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31 Aug 2015, 13:54
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The answer to question two can be found in the last paragraph:

"Instead of pulling the Nutri-Grain brand off the shelves, those in charge of its development chose to generate an extension strategy. The strategy could have focused either on product diversification or development, and since diversification carries more risk, the company opted to alter the product to meet the market demands."

So since diversification carries more risk, the company opted to ALTER the product. It therefore can be inferred that diversification needs no fundamental change in the product itself. Answer C.

The answer to question three can be found in the first paragraph:

"A product's life cycle begins with research and development, as the company attempts to recognize and fill a niche in the market. After a product has been designed according to the parameters recommended by market research, it is launched into the market, during which time it usually enjoys a certain amount of commercial success."

From this paragraph we learn that, the life cycle begins with research & development. AFTER that, the product is being launched. To make it very very short:

1) Process of developing (mixing dough)

So the relationship between a product's launch and the product life cycle is most similar to A:

A - mixing dough and making bread
B - a steering wheel and a car
C - graduating from high school and getting a Bachelor's degree
D - a production line and a factory
E - death and a fatal illness

I admit, this is a very hard task. Economist has usually a higher level in RC than other sources. Does it help?
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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07 Sep 2015, 00:24
1
reto wrote:
The answer to question two can be found in the last paragraph:

"Instead of pulling the Nutri-Grain brand off the shelves, those in charge of its development chose to generate an extension strategy. The strategy could have focused either on product diversification or development, and since diversification carries more risk, the company opted to alter the product to meet the market demands."

So since diversification carries more risk, the company opted to ALTER the product. It therefore can be inferred that diversification needs no fundamental change in the product itself. Answer C.

The answer to question three can be found in the first paragraph:

"A product's life cycle begins with research and development, as the company attempts to recognize and fill a niche in the market. After a product has been designed according to the parameters recommended by market research, it is launched into the market, during which time it usually enjoys a certain amount of commercial success."

From this paragraph we learn that, the life cycle begins with research & development. AFTER that, the product is being launched. To make it very very short:

1) Process of developing (mixing dough)

So the relationship between a product's launch and the product life cycle is most similar to A:

A - mixing dough and making bread
B - a steering wheel and a car
C - graduating from high school and getting a Bachelor's degree
D - a production line and a factory
E - death and a fatal illness

I admit, this is a very hard task. Economist has usually a higher level in RC than other sources. Does it help?

Thanks, reto.

I am still not fully convinced about the second. My reasoning - this is a "part-of" relationship (product launch is a part of the entire life-cycle). Mixing dough is a part of the process for making bread (part-a relationship) but it occurs very early on in the "making bread" process. Conversely, launch occurs at a later stage. Steering wheel is an integral part of a car, but only structurally, not temporally (even so, a tempting answer choice). Now a production line is a part of factory. Also, a production line acts like a life-cycle step in that it has several consecutive steps in it. Also, a production line is a "part-of" the factory, just as launch is just one part of the life-cycle. Thus, both structural and temporal "part-of" is satisfied (temporal because production line has several time-sequenced steps), so why not? Because "factory" is not a process but is a thing?
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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07 Sep 2015, 00:29
1
Would it be possible to explain Question 1?

Quote:
Q1. The author uses the words usually and certain to emphasize that

(A) most products only enjoy a modest measure of commercial success
(B) the life cycle, as it is described in the first paragraph, is not universal
(C) one cannot predict whether a product will be successful or not
(D) companies that employ market research enjoy more success than those which do not
(E) the author's knowledge of product life cycles is limited

The question asks the purpose of two words. If the words in the passage were 'always' or 'certainly', it'd indicate a definitive result. However, 'usually' here means most times (not always) and certain means a number of (not necessarily all). So, the life-cycle is not universal, but rather is applicable to a subset of all products.
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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07 Sep 2015, 12:36
Would it be possible to explain Question 1?

Of course: I assume you were having trouble to choose between B and C?

For B: the words usually and certain indicate that, for some products, the life cycle described in this paragraph is not applicable, i.e., the life cycle is not universal. So it's not about the success of the proudcts itself rather about the life cycle which is described as being not universal.

Official Explanation for C: Since the author advocates a model of product life cycle, it can be inferred he or she believes this model has some use in prediction of success. The author uses these words to qualify (i.e., to add a reservation to) his or her statements about the product life cycle, in other words, to warn that they are not perfect.
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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07 Sep 2015, 12:45
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HardWorkBeatsAll wrote:
Thanks, reto.

I am still not fully convinced about the second. My reasoning - this is a "part-of" relationship (product launch is a part of the entire life-cycle). Mixing dough is a part of the process for making bread (part-a relationship) but it occurs very early on in the "making bread" process. Conversely, launch occurs at a later stage. Steering wheel is an integral part of a car, but only structurally, not temporally (even so, a tempting answer choice). Now a production line is a part of factory. Also, a production line acts like a life-cycle step in that it has several consecutive steps in it. Also, a production line is a "part-of" the factory, just as launch is just one part of the life-cycle. Thus, both structural and temporal "part-of" is satisfied (temporal because production line has several time-sequenced steps), so why not? Because "factory" is not a process but is a thing?

I have found the official solutions:

A. Great job! Mixing dough is one of the stages in the process of making bread. (Here you have Stage XY of a Process (Mixing) + Overall Process (Making Bread) = Product's Launch (Stage XY of a Process) + Product Life Cycle (Overall Process)

To complete, here are the other answers:

B. A steering wheel is a part of a car. Both are objects and cannot be a process or a phase within it.

C. Graduating from high school must occur before one gets a Bachelor's degree. They both may be stages in a process or two actions, one requiring the other. There's an answer choice which better embodies the aforementioned relationship - look for it!

D. A production line is a process that occurs in a factory. A factory is not a process, like the life cycle of a product, but a place.

E. Death is not a phase but the outcome of a fatal illness.

So for this question, you gotta break down the following:

Product's Launch + Product Life Cycle: Now before you consider the answer choices which might confuse you. Think of the two terms, what are they?

Obviously, the Product's Launche is PART of the whole life cycle. Now look for an answer, where you find a subprocess a stage in a process OF a whole!
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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27 Aug 2017, 06:51
reto wrote:
Would it be possible to explain Question 1?

Of course: I assume you were having trouble to choose between B and C?

For B: the words usually and certain indicate that, for some products, the life cycle described in this paragraph is not applicable, i.e., the life cycle is not universal. So it's not about the success of the proudcts itself rather about the life cycle which is described as being not universal.

Official Explanation for C: Since the author advocates a model of product life cycle, it can be inferred he or she believes this model has some use in prediction of success. The author uses these words to qualify (i.e., to add a reservation to) his or her statements about the product life cycle, in other words, to warn that they are not perfect.

Hi, I have some doubt regarding your explanation, if you would read the first paragraph it is said that, first a market research is done and then it is designed, which is common for every product till this point and now it is launched into the market, now after this point certain conditions will decide how my product will perform, this process is generally different for every product because some products can perform exceptional, some are good, some are fair and some are bad...so this is changing while till the point of product launch it is same for every product so how could you say that "the product life cycle is not universal"
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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29 Aug 2017, 01:49
. What does the passage suggest occurs after competition clutters the market with similar products?

A - Competing products force the original product's removal from the market.
B - Sales of both the original product and the competition's product decrease.
C - Enough room remains in the market for a competitor to enter and make a profit.
D - The company's profits decrease.
E - Sales of other companies' product increase and sales of the original product decrease.

How E is right? other companies do decrease original product sales but how other companies sale is increased ? which part of passage suggest this?
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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29 Aug 2017, 11:58
Need help with question A - difficulty choosing b/w B and C.
I chose C

Can someone please breakdown the question and explain the 2 choices.

Q1. The author uses the words usually and certain to emphasize that

(A) most products only enjoy a modest measure of commercial success
(B) the life cycle, as it is described in the first paragraph, is not universal
(C) one cannot predict whether a product will be successful or not
(D) companies that employ market research enjoy more success than those which do not
(E) the author's knowledge of product life cycles is limited
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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19 May 2019, 02:13
2
Rafaelurlich wrote:
This is a pretty straight forward passage, say a 600 level, but it is the questions the real challenge!

I think these are not GMAT kind questions as the options are very unclear and overlapping. I might be wrong, but What i have seen in GMAT official questions are that there is always only one option correct, rather than a better correct or more appropriate. Other options might seem to be confusing but are always wrong and contradictory to question.
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Re: The life cycle of a product depends on its market share, growth and co  [#permalink]

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01 Jun 2019, 22:36
Q1. The author uses the words usually and certain to emphasize that

Detail type question, referring the para one, "After a product has been designed according to the parameters recommended by market research, it is launched into the market, during which time it usually enjoys a certain amount of commercial success". and a line before "A product's life cycle begins with research and development, as the company attempts to recognize and fill a niche in the market."

basis this, it seems like product life cycle if defined in generic language. Option B is saying the same

Q2. What can be inferred from the passage about product diversification?

inference question, reading para 3 "In order to develop the product further, the company reconstructed the brand image based on the fundamental features that made the brand unique."

POE
A - It involves creating various versions of the same product. - not mentioned
B - It requires more investment than product development. - it does require investment in activities such as brand reconstruction etc but comparison is not given with product development, inconsistent
C - It does not necessitate a fundamental change in the product. - yep. Simply paraphrasing of referred sentence
D - It is less prone to failure than product development. - it is risky, less or more not given
E - Although riskier, it can provide greater long-term benefits than product development. - again, inconsistent, no information given in context to long term benefits

Q3. The relationship between a product's launch and the product life cycle is most similar to
Option a is the suitable choice since it starts from something raw and develops into something sale-able and can generate profit to the organization.

Q4. What does the passage suggest occurs after competition clutters the market with similar products?

detail type question, para one, "The market becomes saturated, the original product starts to lose its market position and sales begin to dwindle."
option e is simple paraphrasing.
Re: The life cycle of a product depends on its market share, growth and co   [#permalink] 01 Jun 2019, 22:36
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