Copyright © 2003 Prentice-Hall, Inc. 11-1 The Product Life Cycle.

Copyright © 2003 Prentice-Hall, Inc.

11-1

The Product Life CycleThe Product Life Cycle


11-2

Product Life-Cycle To say that a product has a life cycle asserts four To say that a product has a life cycle asserts four

thingsthings1.1. Products have a limited life.Products have a limited life.2.2. Product sales pass through distance stages, each posing Product sales pass through distance stages, each posing

different challenges, opportunities, and problems to the different challenges, opportunities, and problems to the seller.seller.

3.3. Profits rise and fall at different stages of the product life Profits rise and fall at different stages of the product life cycle.cycle.

4.4. Products require different marketing, financial, Products require different marketing, financial, manufacturing, purchasing, and human resource strategies manufacturing, purchasing, and human resource strategies in each life-cycle stage.in each life-cycle stage.

PLC can be used to analyze product category (Fabric washing PLC can be used to analyze product category (Fabric washing product) , a product form ( washing detergent, SUV’s ) , a product) , a product form ( washing detergent, SUV’s ) , a product (liquid Detergent) or a Brand ( Godrej Ezee, Ford)product (liquid Detergent) or a Brand ( Godrej Ezee, Ford)


11-3

Figure : Style, Fashion, and Fad Life Cycles

Product Life-Cycle

Style is a distinctive mode of expression appearing in the field Of human EndeavourHome , clothing , Art

Fashion is a popular style in a given field – Distinctiveness, emulation , mass fashion and decline

Fads are fashions that come quickly and decline very fast


11-4

Figure : Sales and Profit Life Cycles


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Introduction StageIntroduction Stage Growth tends to be slowGrowth tends to be slowDelay in expansion , Delay in adequate distribution , Customer Delay in expansion , Delay in adequate distribution , Customer

reluctance , sales of expensive new products.reluctance , sales of expensive new products. Profits are negative or lowProfits are negative or lowLow sales, heavy distribution and promotion expensesLow sales, heavy distribution and promotion expenses - need to inform potential consumers- need to inform potential consumers - induce product trial- induce product trial -secure distribution in retail outlets -secure distribution in retail outlets Prices are highPrices are highCosts are high due to technological problemsCosts are high due to technological problemsHigh required margins to support a heavy promotional expend.High required margins to support a heavy promotional expend.

Product Life-Cycle


Product Life-Cycle Marketing Strategies

Skimming Strategy Skimming Strategy Penetration strategyPenetration strategy

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11-7

Growth stage

Demand for the product increases and size of the market Demand for the product increases and size of the market growsgrows

Early adopters like the product and additional consumers Early adopters like the product and additional consumers start buying itstart buying it

New competitors attracted by opportunitiesNew competitors attracted by opportunities They introduce new product features and expand They introduce new product features and expand

distributiondistribution Price remains same or fall slightlyPrice remains same or fall slightly Promotion remain same or slightly increase to meet Promotion remain same or slightly increase to meet

competitioncompetition Sales rise much faster than promotional expenses causing Sales rise much faster than promotional expenses causing

welcome decline in promotion-sales ratiowelcome decline in promotion-sales ratio Profit increases as unit manufacturing cost fall because of Profit increases as unit manufacturing cost fall because of

large volumelarge volume


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Marketing Strategies: Growth StageMarketing Strategies: Growth Stage Improve product quality and add new product Improve product quality and add new product

features and improved styling – features and improved styling – Coffee Café’sCoffee Café’s

Add new models and flanker products – Add new models and flanker products – Maruti-800 , Maruti-800 , Zen , Maruti OmniZen , Maruti Omni

Enter new market segments – Enter new market segments – J&J , Mc Donalds , FeminaJ&J , Mc Donalds , Femina

Increase distribution coverage and enter new Increase distribution coverage and enter new distribution channels – distribution channels – Amway , Avon , Tupper wareAmway , Avon , Tupper ware

Shift from product-awareness advertising to Shift from product-awareness advertising to product-preference advertising – product-preference advertising – Comparative AdsComparative Ads

Lower prices to attract next layer of price-sensitive Lower prices to attract next layer of price-sensitive buyers – buyers – Coke vs Pepsi , surf , carsCoke vs Pepsi , surf , cars



11-9

Maturity Stage At some point of time the rate of sales growth will slow At some point of time the rate of sales growth will slow

and the product will enter the stage of maturityand the product will enter the stage of maturity This stage lasts longer than previous stagesThis stage lasts longer than previous stages

Most products are at maturity stage of product life cycle Most products are at maturity stage of product life cycle and most marketing managers cope with this problem of and most marketing managers cope with this problem of marketing the mature productmarketing the mature product

Only the giant firms will survive perhaps the quality leader , Only the giant firms will survive perhaps the quality leader , service leader and cost leader that serves the whole market service leader and cost leader that serves the whole market and makes profit through high volumeand makes profit through high volume

Bajaj managing product and Brand in a mature stageBajaj managing product and Brand in a mature stage


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Marketing Strategies: Maturity StageMarketing Strategies: Maturity Stage Market ModificationMarket Modification

Expand number of brand users by:Expand number of brand users by:1.1. Converting nonusers – Converting nonusers – Shampoo SachetsShampoo Sachets

2.2. Entering new market segments- Entering new market segments- J&J , Pears pink for kids, GarnierJ&J , Pears pink for kids, Garnier

3.3. Winning competitors’ customers – Winning competitors’ customers – PepsiCo. Surf Vs Ariel PepsiCo. Surf Vs Ariel

Convince current users to increase usage by:Convince current users to increase usage by:1.1. Using the product on more occasions – Using the product on more occasions – Heinz Vinegar to clean windows , Heinz Vinegar to clean windows ,

Cadbury for all celebration occasions , Juices morning and evening., Milkmaid Cadbury for all celebration occasions , Juices morning and evening., Milkmaid ( Nestle) , Mithaimate (Amul) for variety of dessert preparations at home , Monaco( Nestle) , Mithaimate (Amul) for variety of dessert preparations at home , Monaco

2.2. Using more of the product on each occasion - Using more of the product on each occasion - Priyagold juicesPriyagold juices – – Ab Koi Pani Nahi Mangega, Drink larger glass of juice , Ab Koi Pani Nahi Mangega, Drink larger glass of juice ,

3.3. Using the product in new ways – Dettol , Using the product in new ways – Dettol , Use Asprin daily for reducing Use Asprin daily for reducing chances of stroke , Chocolates prevents heart srokes, Wine good for heart.chances of stroke , Chocolates prevents heart srokes, Wine good for heart.



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Product modificationProduct modification Quality improvementQuality improvement – “Plus launch”, stronger , bigger , better WIMCO’s – “Plus launch”, stronger , bigger , better WIMCO’s

safety matches which included Carburization of match sticks and a new wrapper safety matches which included Carburization of match sticks and a new wrapper for wholesale packing., Chakki fresh Atta by Piilsburyfor wholesale packing., Chakki fresh Atta by Piilsbury

but be aware : Coca Cola Story in 1985but be aware : Coca Cola Story in 1985 Feature improvement-Feature improvement- size , weight , accessories that expand product’s size , weight , accessories that expand product’s

versatility , safety and convenience versatility , safety and convenience e.g Pan Parag adding new ingredients to the product like Zarda or Tobacco , e.g Pan Parag adding new ingredients to the product like Zarda or Tobacco ,

changing its packaging like Sachet from Tin can containing 100gms of Masala, changing its packaging like Sachet from Tin can containing 100gms of Masala, Pfizer-Listerine’s Pocketpak oral care stripsPfizer-Listerine’s Pocketpak oral care strips

Marketing-Mix ModificationMarketing-Mix Modification PricesPrices DistributionDistribution AdvertisingAdvertising Sales promotionSales promotion Personal sellingPersonal selling ServicesServices



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Michael Boneham, President and Managing Director, Ford India, with the new Figo in Mumbai on Monday. Photo: Shashi Ashiwal


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Decline stage

The sale of most products and brands decline The sale of most products and brands decline The decline might be slow or rapidThe decline might be slow or rapid Sales may plunge to 0 or may reach a lower levelSales may plunge to 0 or may reach a lower level

• Technological advancesTechnological advances

• shift in consumer taste and preferences : Maggie shift in consumer taste and preferences : Maggie Example Example

• domestic and foreign competition – some domestic and foreign competition – some

firms withdraw from market or reduce no. firms withdraw from market or reduce no.

of products they offerof products they offer

Ambassador , Dalda , Pagers , Mopeds , ScootersAmbassador , Dalda , Pagers , Mopeds , Scooters


11-14

Marketing Strategies: Decline StageMarketing Strategies: Decline Stage

• More attention to aging productsMore attention to aging products• Identify aging product by regularly reviewing sales , Identify aging product by regularly reviewing sales ,

market shares , costs and profit trends.market shares , costs and profit trends.• MaintainMaintain : Reposition or rejuvenate the brand e.g : Reposition or rejuvenate the brand e.g

Ambassador carsAmbassador cars• HarvestHarvest : reducing various costs (plant and equipment , : reducing various costs (plant and equipment ,

maintenance, R&D, Advertising, Sales force )maintenance, R&D, Advertising, Sales force )• Drop Drop : Liquidate its salvage value. P&G – Crisco oil , : Liquidate its salvage value. P&G – Crisco oil ,

Comet cleanser , Sure Deodorant , duncan Hines Cakes Comet cleanser , Sure Deodorant , duncan Hines Cakes



11-15

Life-cycle critique

Life-cycle patterns are too variable in the shape and Life-cycle patterns are too variable in the shape and durationduration

It lacks any fixed sequence of stagesIt lacks any fixed sequence of stages Marketers can seldom tell that what stage the product is Marketers can seldom tell that what stage the product is

inin PLC pattern is the result of marketing strategy rather PLC pattern is the result of marketing strategy rather

than the course that sales must followthan the course that sales must follow It is dependent variableIt is dependent variable

Copyright © 2003 Prentice-Hall, Inc. 11-1 The Product Life Cycle.

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Transcript of Copyright © 2003 Prentice-Hall, Inc. 11-1 The Product Life Cycle.