Question

Marketing costs are high in the introductory stage of the product life cycle because:
a. product design changes become stylistic rather than functional.
b. high dealer margins are often needed to obtain adequate distribution.
c. manufacturers scramble to sign up dealers and distributors.
d. emphasis is given to communication of the differences between brands in the market.

Answer 1

Marketing costs are high in the introductory stage of the product life cycle because
(b) HIGH DEALER MARGINS ARE OFTEN NEEDED TO MAINTAIN ADEQUATE DISTRIBUTION.

Product life cycle consists of 4 stages:
1. Introductory stage
2. Growth stage
3. Maturity stage
4. Decline stage

Introductory stage is a stage when the product is actually introduced in the market. It is a costlier stage than other stages. and the additional costs such as branding, promotional costs are included in this stage.