In the decline phase of the PLC, price is pressured as a result of _______.
A) Consumers forgetting about the brand
B) New companies forging ahead in the market and offering lower prices to gain market share
C) Suppliers give us price concessions but that does not help with the reduction in market size
D) Competitors dropping price and costs remain high due to lower sales volume
E) None of the above

Question

Quizplus · Accepted Answer

In the decline phase of PLC, sales volume decreases which leads to a reduction in revenue. This puts pressure on companies to lower their prices in order to remain competitive. However, costs remain high due to lower sales volume, making it difficult for companies to maintain profitability. Additionally, competitors may also drop their prices to maintain market share, further adding to the pressure on pricing. Therefore, option D is the correct answer.

In the Decline Phase of the PLC, Price Is Pressured