What Is the Product Life Cycle? The term product life cycle refers to the length of time from when a product is introduced to consumers into the market until it’s removed from the shelves. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase
What Is a Product Line? A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names, seeking to distinguish them from each other for better usability for consumers. Companies often expand their offerings
What Is Product Placement? Product placement is a form of advertising in which branded goods and services are featured in a production that targets a large audience. Also known as “embedded marketing” or “embedded advertising,” product placements are typically found in movies, television shows, personal videos, radio, and—less commonly—live performances. In exchange for product placement
What Is a Product Portfolio? A product portfolio is the collection of all the products or services offered by a company, each with a different growth rate and market share. Product portfolio analysis can provide nuanced views on a stock type, company growth prospects, profit margin drivers, income contributions, market leadership, and operational risk. This
What Is Product Recall Insurance? Product recall insurance covers expenses associated with recalling a product from the market. Product recall insurance is typically purchased by manufacturers such as food, beverage, toy, and electronics companies to cover costs such as customer notification, shipping costs, and disposal costs. Coverage generally applies to the firm itself, though additional
What Is Professional Liability Insurance? Professional liability insurance (PLI) protects professionals such as accountants, lawyers, and physicians against negligence and other claims initiated by their clients. Professionals with expertise in a specific area require this type of insurance because general liability insurance policies do not offer protection against claims arising from negligence, malpractice, mistakes, or misrepresentation.
What Is Profit? Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Any profits earned funnel back to business owners, who choose to either pocket the cash, distribute it to shareholders as dividends, or reinvest it back into
What Is the Profitability Index (PI)? The profitability index (PI), alternatively referred to as value investment ratio (VIR) or profit investment ratio (PIR), describes an index that represents the relationship between the costs and benefits of a proposed project. The profitability index is calculated as the ratio between the present value of future expected cash
What Is the Profitability Index (PI) Rule? The profitability index rule is a decision-making exercise that helps evaluate whether to proceed with a project. The index itself is a calculation of the potential profit of the proposed project. The rule is that a profitability index or ratio greater than 1 indicates that the project should
What Is Profit before Tax (PBT)? Profit before tax is a measure that looks at a company’s profits before the company has to pay corporate income tax. It essentially is all of a company’s profits without the consideration of any taxes. Profit before tax can be found on the income statement as operating profit minus
