PRODUCT LIFE CYCLEWITH CASE STUDIES

INTRODUCTION A product is introduced among consumers, and if consumers perceive it as meeting their needs and want, it experiences a period of growth. Subsequently, it reaches the stage of maturity and when it loses its appeal, its decline starts and eventually is may be taken off the market (demise). The classical product life cycle curves are depicted as “S” shaped and generally divided in four stages: Introduction, growth, maturity, and decline.

Introduction Growth Maturity Decline

(d) Classical Life Cycle Pattern

Time

Sales

Profits

Loss

Common Product Life Curves

Introduction Stage

The introductory stage is viewed as fairly risky and quite expensive because large amounts of money is spent on advertising and other tools of marketing communications to create consumer awareness in sufficiently large numbers, and encourage trial.

3D Televisions: 3D may have been around for a few decades, but

only after considerable investment from broadcasters and

technology companies are 3D TVs available for the home,

providing a good example of a product that is in the Introduction

Stage.

INTRODUCTION STAGE OF THE PLC

SalesCostsProfits

Marketing Objectives

ProductPrice

Low sales

High cost per customer

NegativeCreate product awareness

and trialOffer a basic product

Use cost-plus

Distribution Build selective distribution

Advertising Build product awareness among early adopters and

dealers

Growth Stage

The growth stage of life cycle is characterized by a sharp rise

in sales. Only a small percentage of new products introduced

survive to reach the growth stage.

Tablet PCs: There are a growing number of tablet PCs for

consumers to choose from, as this product passes through the

Growth stage of the cycle and more competitors start to come

into a market that really developed after the launch of Apple’s

iPad. Another example is NANO car.

Growth Stage of the PLC

SalesCostsProfits

Marketing Objectives

ProductPrice

Rapidly rising sales

Average cost per customer

Rising profits

Maximize market shareOffer product extensions,

service, warrantyPrice to penetrate market

Distribution Build intensive distributionAdvertising Build awareness and interest

in the mass market

Maturity Stage

Most products after surviving competitive battles, winning

customer confidence and successful through growth phase enter

their maturity stage. The sales plateau, and this flattening of

sales usually lasts for some time because most products in the

category have reached their maturity stage, and there is stability

in terms of demand, technology, and competition.

Laptops: Laptop computers have been around for a number of

years, but more advanced components, as well as diverse

features that appeal to different segments of the market, will help

to sustain this product as it passes through the Maturity stage.

Maturity Stage of the PLC

SalesCostsProfits

Marketing Objectives

ProductPrice

Peak sales

Low cost per customer

High profitsMaximize profit while defending

market shareDiversify brand and models

Price to match or best competitors

Distribution Build more intensive distribution

Advertising Stress brand differences and benefits

Decline Stage

Decline stage sets in when customer preferences change

due to the availability of technologically superior products

and consumers’ shift in values, beliefs, and tastes to

products offering more value.

Decline Stage of the PLC

SalesCostsProfits

Marketing Objectives

ProductPrice

Declining sales

Low cost per customer

Declining profitsReduce expenditure and milk

the brandPhase out weak items

Cut price

DistributionGo selective: phase out

unprofitable outlets

Advertising Reduce to level needed to retain

hard-core loyal customers

Implications and Limitations of Product Life Cycle Concept

Product life cycle concept shows a framework to spot the occurrence of opportunities and threats in a product market and the industry. This can help firms to reassess their objectives, strategies, and different elements of marketing programme.

INTRODUCTION- HUL

Hindustan Unilever Limited (HUL) is India's largest FMCG company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages.

INTRODUCTION-LUX

1916LUX

launched in USA as Laundry

soap

1929LUX

launched in India1925

LUX launched in

USA as Toilet soap

1960LUX went colored

PRODUCT LIFE CYCLE

INTRODUCTION (1929- 1950S)Company Objectives Actions

Sales Low

Cost of manufacturing HighProfits Negative

Marketing Objective Create product awareness in major cities

Product strategy Offer a basic productPrice strategy Higher than LifebuoyDistribution Created network in major

citiesAdvertising strategy Awareness among early

adopters.

GROWTH- (1950S- 1990S)Company Objectives Actions

Sales Rising Sales

Cost of manufacturing Average cost reductionProfits Positively increasing

Marketing Objective Maximise market shareProduct strategy Offer variants

Price strategy To penetrate the marketDistribution Intensive network in the

entire countryAdvertising strategy Awareness an interest in

mass market

MATURITY-(1990S TO TILL DATE )Company Objectives Actions

Sales Peak sales

Cost of manufacturing LowProfits High

Marketing Objective Maximize profit while defending market share

Product strategy Diversify brand Price strategy To match the nearest competitorDistribution More intensive focusing on rural

areaAdvertising strategy Multiple brand ambassadors for

different variants.

CASE STUDY 2: CADBURY

CADBURY-HISTORY Cadbury Chocolates was started in

Birmingham in 1824 by John Cadbury. Cadbury Dairy Milk came up with the mix

of milk and chocolate tray which is pretty much how the product still is.

No drastic change in the recipe of the product but the packaging and the representation and prominence of the ‘glass and half of milk’ logo has changed over a period of time.

1904 - A new recipe is perfected by George Cadbury for milk chocolate.

1905 - Cadbury launches Dairy Milk onto the market

1913 - Dairy Milk becomes Cadbury's best selling line.

1928 - Fruit & Nut is introduced as a variation of Dairy Milk

1933 - WholeNut is added to the Dairy Milk family.

1948 - Cadbury Dairy Milk is sold in India 1998 - Dairy Milk is re-launched with the

new and modern pack design, but its recipe and unique taste are still very similar to the original recipe

2005 - Cadbury Dairy Milk celebrates its 100th birthday

CONSUMER TRENDS The Mithaai or sweet has been the tradition

in India so far. Chocolates are now trying to break into

that league. Chocolates are more of an impulse buy. Consumers are preferring chocolates to

Mithaai because of proper packaging, longer shelf life, mid-range pricing and convenience.

CONTINUED.... Consumers have started showing interest in

not just milk chocolates but other varieties like Dark Chocolate etc.

One of the major challenges that Cadbury Dairy Milk faces is a decline in sales due to new variants being introduced in the market by other brands which could result in the product moving from maturity to decline stage.

Another major challenge comes from a different product category altogether which is the Indian Sweets or Mithaai.

INTRODUCTION In the 1980s, CDM was positioned as ‘the

perfect expression of love’, captured in memorable copy.

During the early1990s, communicating that it was the ‘real taste of chocolate’.

In 1994 came the path-breaking ‘real taste of life’ campaign.

Cadbury Dairy Milk redefined itself as the perfect expression of spontaneous, shared good feelings, providing the ‘real taste of life’ experience.

The strategy paid off: Brand Cadbury grew by over 50% in sales volumes.

GROWTH 1998- The next stage of growth for the

brand deals with popularizing consumption in a social context, especially in more traditional settings like weddings.

With the campaign ‘Khaanein waallon ko khaanein ka bahana chahiye’

Cadbury Dairy Milk aimed to substantially increase penetration levels with the award winning ‘Kuchh khaas hai.. .’campaign.

The brand penetrated into smaller towns and sales volumes grew by 40%

MATURITY With Bachchan they also launched their new

positioning of “Kuch Meetha Ho Jaaye” bringing in the tradition of celebrating a joyous occasion in India with sweets and now Cadbury Dairy Milk in particular.

The “Pehli Tareekh Hai” campaigns talked about the importance of having Dairy Milk and celebrating on getting your pay on pay-day.

“Shubh Aarambh” ads that have brought back the old charm of Cadbury Dairy Milk with its very interesting insight of mixing the traditional with the new age

DECLINE / NEW PRODUCT INTRODUCTIONMany marketing experts would agree

that the best time to reinvent for a brand is when the going is still good.

No brand can afford to assume it’s created the definitive product.

Cadbury Dairy Milk(CDM) introduce the sub brand Silk.

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