Final answer:
During the maturity phase of the product lifecycle, firms typically reduce advertising and sales promotion expenditures as they focus on maintaining market share and customer retention rather than aggressive expansion. The correct answer regarding advertising in this phase is (d) firms typically reduce advertising and sales promotion expenditures.
Step-by-step explanation:
When discussing the role of advertising in the product lifecycle, specifically during the maturity phase, it's essential to understand the strategic adjustments companies make. In the maturity phase, the market is often saturated, and products face increased competition. At this stage, the goal of advertising shifts towards maintaining market share and reminding customers of the product's benefits rather than trying to build market share aggressively. As such, companies may adjust their strategies to focus more on differentiating their offerings and retaining existing customers rather than aggressively seeking new ones.
The correct answer to the question, "Which of the following is TRUE regarding the use of advertising when products are in the maturity phase of the product lifecycle?" is (d) firms typically reduce advertising and sales promotion expenditures. This is because the product is established, competition tends to be fiercer, and the growth potential might be more limited compared to the growth phase. Therefore, the focus often turns to optimizing marketing spend and maximizing profit rather than investing heavily in promotions as would be done in the earlier stages of the lifecycle.
However, this does not mean that advertising ceases to be significant. Companies still invest in advertising to defend their market position, engage in brand reinforcement, and foster customer loyalty. The nature of the advertising may change, leaning more towards reminder advertising and loyalty rewards, rather than broad-based awareness campaigns.