Which of the following best describes the conditions found in the market maturity stage of the product life cycle?
A. Consumers view the products in the market as homogenous.
B. Industry profits begin to rise.
C. Promotional advertising is unnecessary.
D. Industry sales are at their lowest point.
E. New firms can only enter the market during this phase.
Answer: (A) The question focuses on the understanding of the product life cycle and its maturity stage. In market maturity, products vary only slightly from that of the competition. Because of this, a lot of product differentiation is minute, and the focus may be on low prices. In addition competitors may have copied marketing variables from the industry leader. (B) is incorrect. Industry profits begin to decline in this phase because of the numbers of competitors who have entered the market. Promotional advertising is necessary during this phase, so that companies can point out their product differences, thus (C) is incorrect. (D) is incorrect. Industry sales are not at their lowest; conversely, they are at their highest. (E) is also incorrect. A firm can enter the market during any phase of the product life cycle.