As you correctly pointed out Apple does a good job with new products in the mark

Question

As you correctly pointed out Apple does a good job with new products in the market growth stage, because industry sales grow fast but industry profits rise and then start falling. In this stage the company or the innovator realizes big profits and attracts competition. Competitors may try to copy the innovator, or to improve on what the innovator has introduced. Also some competitors may try to offer a product to a more narrowly defined target market. This is when competitors enter and monopolistic competition develops, leading to a downward sloping demand curves. Industry profits reach their peak in this stage, but then begin to decline with more competition and increasing consumer price sensitivity and this is when Apple does a good job of introducing new products. Why do consumers become more price sensitive in the market growth stage?

Explanation / Answer

In the market growth stage there exists limited knowledge and experience of the product with the customer/ consumer base. The perception and the reach does not exist yet, and hence the customer tends to be cautious of the price that he/ she pays for the product. This makes the consumers/ customers highly price sensitive in the market growth stage.

The customers at this phase of the product generally rely on the innovators who have already tried out the product. and hence there is limited knowledge that exists for the product. This causes the customers to focus on the price more than the product features.

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