DECA Marketing Cluster Practice Exam

During which stage of the Product Life-Cycle is the market for the product starting to shrink?

1. Growth

2. Maturity

3. Introduction

4. Decline

The correct answer is: Decline

The correct answer is the stage known as Decline. During the Decline stage of the Product Life Cycle, the market for the product begins to shrink due to various factors such as changes in consumer preferences, the introduction of new and better alternatives, or market saturation. In this phase, sales and profits typically decline, and companies may need to make strategic decisions about whether to discontinue the product, reduce costs, or find ways to rejuvenate the product's market presence. The other stages of the Product Life Cycle do not involve a shrinking market. In the Introduction stage, the product is newly launched, and the market is just starting to grow as consumers become aware of the product. The Growth stage sees increasing sales as more consumers adopt the product, leading to rising profits. The Maturity stage is characterized by a slowdown in sales growth as the product reaches widespread acceptance, but it does not signify a decline in market size; rather, it indicates that sales have stabilized. In contrast, the Decline stage distinctly marks the beginning of shrinking sales and market presence.