Product Life Cycle (4)

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Marketing Management 1 Product Life Cycle

PRODUCT LIFE CYCLE

Marketing Management 2 Product Life Cycle

PRODUCT LIFE CYCLE A project report submitted in partial fulfillment of First Year of MMS Division B 2012-14 by

NAME
HUZEFA KATHAWALA POOJA MISHRA RACHAYEETA MOKASHI SACHIN NAIR SANKET NARKHEDE 74 92 97 101 102

ROLL NUMBER

Under the guidance of

Prof. Mrs. Pallavi K. Mhatre

Marketing Management 3 Product Life Cycle

DECLARATION We, Group 6, students of MET Educational Trust, Bandra (W), Mumbai-400050, studying in M.M.S – DIV B (Semester-1) hereby declare that we have completed this project “PRODUCT LIFE CYCLE”. This information submitted is true and original to the best of our knowledge. The project is original and authentic to the best of our knowledge

Marketing Management 4 Product Life Cycle

ACKNOWLEDGEMENT We , Group 6, would like to express our gratitude to our PROF. MRS. PALLAVI.K.MHATRE for her valuable guidance, whole- hearted cooperation and generous helping in carrying out this project. Without her help, this project would not have been possible.

We wish to place on record our deep sense of gratitude to all those who contributed in one way or the other to the success in the completion of our project.

Marketing Management 5 Product Life Cycle

INDEX
CHAPTER NO
1.) 2.) 2.1) 2.2) 3.) 3.1) 3.2) 3.3) 3.4) 3.5) 3.6) 3.7) 4.) 4.1) 4.2) 5.) 5.1) 6.) 6.1) 6.2) 6.2.1) 6.2.2) 6.2.3) 7) 8)

TOPIC INTRODUCTION STAGE 1
Main Objective Example

PAGE NO
6 7

STAGE 2
Growth Example Products Interactive Service Distribution Advertising and sales and promotion High Stake Game

8

STAGE 3
Example Marketing Strength

11

STAGE 4
Example

14

EXAMPLE SHOWING ALL THE STAGES
Product life cycle Introduction Growth Maturity Decline

16

CONCLUSION BIBLIOGRAPHY

19 20

Marketing Management 6 Product Life Cycle

INTRODUCTION__________________________________________________
Definition: The product life cycle is an economic theory developed by Raymond Vernon to explain the observed pattern of international trade. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Not all products reach this final stage. Some continue to grow and others rise and fall.

The main stages of the product life cycle are: 1. Introduction – researching, developing and then launching the product 2. Growth – when sales are increasing at their fastest rate 3. Maturity – sales are near their highest, but the rate of growth is slowing down, e.g. new competitors in market or saturation 4. Decline – final stage of the cycle, when sales begin to fall

Marketing Management 7 Product Life Cycle

STAGE 1 INTRODUCTION
The main objective of this stage is to create product awareness and trial. 1. 2. 3. 4. In this stage the basic product is introduced Distribution is selective Product awareness is built among early adopters and dealers through advertisements Heavy sales promotion are used to encourage trial

Example of a product in the introductory stage is the product NIGHT KNIGHT. Night Knight is a product from the House of Textiles – NIDRA. It is in business since 25 years. The company’s objective is to establish itself as a successful brand in the Indian retail market. It is an active and unusual key to “No More Mosquitoes”.It is easy to carry .. “A small Marvel”. It kills not only mosquitoes but all types of insects. It is safe and sound proven by W.H.O It is currently priced @ Rs299 /- per Blanket. Penetrative method of pricing is used. It is aimed at persuading the customers to try the new concept. Night Knight is available in Sahakari Bhandar outlets at Matunga, Chembur, Malad ,etc and not in general stores or retail mall outlets .They have tied up with 93.5 Red FM and advertising on Radio by different means. Hoardings are being put and events are being held to get attention. It is also being advertised through facebook. Sales are being promoted by Events – Launch Party, Contests on 93.5 Red FM, Introductory Offers such as gift Hampers for the first 5 buyers , free give away for the next 15 buyers & Donation, Drive ,etc.

Marketing Management 8 Product Life Cycle

STAGE 2 GROWTH

1. 2. 3. 4. 5. 6.

The objective of this stage is to maximize the market share. Product extensions and service warranty are offered in this stage Penetrative pricing technique is used to increase the market share Distribution is intensive Advertising is done to build awareness and interest in mass market Sales promotion are reduced to take advantage of heavy consumer demand

Example of a product in this stage is TATA SKY DTH. Incorporated in 2004, Tata Sky is a JV between the TATA Group and STAR. Tata Sky DTH endeavours to offer Indian viewers a world-class television viewing experience through its satellite television service. The TATA Group is one of India’s largest and most respected business conglomerates. It comprises diversified businesses in sectors such as materials, engineering, services, energy, information systems & communications, consumer products and chemicals.The Group and its enterprises have been steadfast and distinctive in their adherence to business ethics and their commitment to corporate social responsibility. This is a legacy that has earned the Group the trust of many millions of stakeholders in measure few business houses anywhere in the world can match . Tata Sky DTH service, launched in August 2006, has so much to offer in terms of world class entertainment. We already have over 10 million subscriber connections and are the fastest growing DTH provider in India. Products: Tata sky: As digitisation becomes mandatory, you will be able to watch pay TV only using a Set Top Box. Tata Sky can help you choose the right Set Top Box, with its superior offerings. Tata Sky HD Enjoy a high definition digital TV experience (1080i resolution, 7.1 Surround Sound) only on Tata Sky HD with great picture quality, incredibly vivid colours, sharper images and stunning surround sound. Tata Sky+ HD Tata Sky+ HD offers you amazing HD picture quality along with the power to pause, record & rewind live TV, with help of the most advanced Set Top Box in India. Specials features : Unmatched Customer Service:

Marketing Management 9 Product Life Cycle

Our DTH service offers 24x7 customer care support in 13 languages. What's more 98% of the calls are answered within 20 seconds! One Year Warranty and More Enjoy 12 months all-inclusive warranty on your Tata Sky Set Top Box. Post the warranty period, Tata Sky also offers an Annual Service Commitment service to its subscribers for a nominal fee. Relocation Services Take your Tata Sky wherever you go with our relocation services across the country. Pay for what you Watch Choose from a variety of channel packages and pay only for what you want to watch. Keeping in mind our diverse audience, we also offer a range of regional content on our digital TV service. Interactive services Tata Sky offers many new-age interactive services: Actve Music, Actve English, Actve Cooking, Actve Wizkids, Actve Learning, Actve Games, Actve Sports, Actve Darshan and Actve Doordarshan. Showcase can be ordered with any of the Base packages. MAD As digitisation becomes mandatory, you will be able to watch pay TV only using a Set Top Box. Tata Sky can help you choose the right Set Top Box, with its superior offerings. The government, this year had passed a regulation which made it mandatory to convert all the analog cable TV lines into digital. While the move preliminarily appeared only to benefit the Govt. & was opposed, closer inspection of the recommendations by the TRAI has revealed points with mutual benefits to all,this move by the government comes post an amendment to the Section 4A of the Cable Regulation Act, 1995, which directs the compulsory implementation of mandatory addressable digitization (MAD). This new ruling essentially implies that all cable operators will have to, before deadlines switch the signals that they transmit to digital, instead of the earlier analog. Distribution : To offer maximum convenience to subscribers, Tata Sky has set up a pan-India distribution network of popular consumer electronic stores and mobile phone outlets for retailing its hardware and prepaid recharge vouchers. The company has also tied up with LG, ITC International Business Division and Indian Oil Corporation as part of its distribution drive. Tata Sky will be responsible for installing and servicing the hardware at every subscriber's home, thereby ensuring the highest levels of customer service. The company has engaged a field force of approximately 3000 people who will be complemented by a high-end, 24x7 call centre, manned by multi-lingual customer service associates trained to solve all customer problems. Advertising and sales and promotion : (Economic times 28May 2012) Tata Sky unleashes new Ad campaign as countdown begins to mandatory cable digitization: Drop cable, upgrade to Tata Sky," reads the latest ad of the direct-to-home (DTH) service provider, as the cut-throat rivalry between DTH players and cable operators intensifies in the countdown to the first phase of compulsory digitisation in the top four metros by October 31st. "Your TV will continue to run on your inverter even during a power cut...isn't this a reason enough to choose Tata Sky over cable," says another advertisement, as the DTH major unleashes its third phase of print and out-of-home (OOH) ad blitzkrieg to lure millions of cable users in the top four cities to its services.

Marketing Management 10 Product Life Cycle

Vikram Mehra, Chief Marketing Officer of Tata Sky, says the campaign is directed at educating consumers so that they can make an informed choice."Our latest print campaign tells subscribers to do their homework before they buy a set-top box (STB) so that they chose Tata Sky and not just some dabba (box)," says Mehra. It's not targeting any cable operator, he adds. With over 9 million subscribers, Tata Sky is the second-largest DTH service provider in the country, after Dish TV. Last December, Lok Sabha passed the Cable Television Networks (Regulation) Amendment Bill, 2011, which makes it compulsory for cable companies to convert their analogue system to digital in a phased manner from June 2012. Consequently, in the first phase of digitisation, India's top four metros-Delhi, Mumbai, Chennai and Kolkata-will have to replace all analog television networks with digital transmission from July 1, 2012. This means that all cable subscribers would need to get digital STBs in order to ensure that their TVs don't go blank. By March next year, as many as 38 cities across the country would be brought into the digital fold. High-stake game While phase 1 has around 10 million TV homes in the four metros, over 90 million analogue cable TV homes are estimated to convert to digital by the end of fourth phase in December 2014. Stakes are indeed high for DTH players who have a ready, captive base of millions of analogue cable TV customers, who just need to install a digital set top box in their homes. DTH is expected to grow at a healthy CAGR of 20 per cent for the next 5-7 years, says Abhishek Chauhan, Senior Consultant, ICT Practice, Frost & Sullivan, South Asia & Middle East. DTH contribution would increase to more than 30 per cent to overall the pay TV market, reducing the cable providers' contribution to less than 65 per cent, he says. While the number of DTH households in the country is set to go up from 37 million in 2011 to 86 million by 2016, digital cable would see its subscriber base jump from a mere 6 million to 75 million, according to a recent FICCI-KPMG report. The number of cable and satellite (C&S) households is estimated to reach approximately 176 million by 2016, of which paid C&S households is estimated at 168 million, representing 89 per cent of total TV households. In 2011, 146 million households in India had television sets; 119 million of which used cable or satellite services, says the report. Isko Laga dala toh life Jhingalala…..

Marketing Management 11 Product Life Cycle

STAGE 3 MATURITY
1. 2. 3. 4. 5.

The Marketing Objective of this stage is to maximize the profit while defending the market share. The brands and item models are diversified. The price is set to match/beat competition In advertisements brand differences and benefits are stressed Sales Promotion is increased to favour brand switching

Example of a product in this stage is Parle-G

About the Company: A cream colored yellow stripped wrapper with a cute baby photo containing10 – 12 biscuits with the company’s name printed in Red and you know these are Parle G biscuits. Times changed, variety of biscuits did come and go but nothing has changed with these biscuits. Yes, the size of their packing has definitely changed but for the consumers good as these are money savers pack. The Parle name conjures up fond memories across the length and breadth of the country. After all, since 1929, the people of India have been growing up on Parle biscuits & sweets. Initially a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went onto become leading names for great taste and quality. For around 75 years, Parle have been manufacturing quality biscuits and confectionery products. Over the years Parle has grown to become a multi million-dollar company with many of the products as market leaders in their category. There cent introduction of Hide & Seek chocolate chip biscuits is a product of innovation and caters to a new taste, being India’s first ever chocolate-chip

Marketing Management 12 Product Life Cycle

biscuits. PARLE G - THE EVOLUTION !!! Parle-G has been a strong household name across India. The great taste, high nutrition, and the international quality, makes Parle-G a winner. No wonder, it's the undisputed leader in the biscuit category for decades .Parle-G is consumed by people of all ages, from the rich to the poor, living in cities & in villages. While some have it for breakfast, for others it is a complete wholesome meal. For some it's the best accompaniment for chai, while for some it's a way of getting charged whenever they are low on energy. Because of this, Parle-G is the world's largest selling brand of biscuits.Launched in the year 1939, it was one of the first brands of Parle Products. It was called Parle Glucose Biscuits mainly to cue that it was a glucose biscuit. It was manufactured at the Mumbai factory, Vile Parle and sold in units of half and quarter pound packs.The incredible demand led Parle to introduce the brand in special branded packs and in larger festive tin packs. By the year 1949, Parle Glucose biscuits were available not just in Mumbai but also across the state. It was also sold in parts of North India. The early 50s produced over150 tones of biscuits produced in the Mumbai factory. Looking at the success of Parle-G, a lot of other me-too brands were introduced in the market. And these brands had names that were similar to Parle Glucose Biscuits so that if not by anything else, the consumer would err in picking the brand. This forced Parle to change the name from Parle Glucose Biscuits to Parle-G. packed in the wax paper pack, today it is available in a contemporary, premium BOPP pack with attractive side fins. The new airtight pack helps to keep the biscuits fresh and tastier for a longer period. Parle-G was the only biscuit brand that was always in short supply. It was heading towards becoming an all-time great brand of biscuit. Parle-G started being advertised in the 80's. It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition. In 1989, Parle-G released its Dadaji commercial, which went on to become one of the most popular commercials for Parle-G. The commercial was run for a period of 6 years. Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the number of consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit any more. It had become an icon. The next level of communication associated the brand with the positive values of lifelike honesty, sharing and caring. In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success. The personality of the superhero matched the overall superb benefits of the brand. Parle extended this association with Shaktimaan and gave away a lot of merchandise of Shaktimaan, which was supported by POS and press communication. The children just could not get enough of Parle-G and Shaktimaan. In the year 2002, it was decided to bring the brand closer to the child who is a major consumer. A national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children. There were over 5 lakh responses and of that, over 300 dreams were fulfilled. Dreams that were fulfilled ranged from trips to Disneyland at Paris &Singapore; free ride on a chartered plane; 20 scholarships worth Rs 50,000;a special cricket coaching etc. The year 2002 will go down as a special year in Parle-G's advertising history. A year that saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a super-hero that saves the entire world, especially children from all the evil forces. A campaign that is not just new to the audiences but one that involves a completely new way of execution that is loved by children all over the world – Animation To make the brand much more interesting and exciting with children, it was decided to launch a premium version of Parle-G called Parle-G Magix in the year 2002. Parle-G Magix is available

Marketing Management 13 Product Life Cycle

in two exciting tastes - Choco and Cashew. The year 2002 also witnessed the launch of Parle-G Milk Shakti, which has the nourishing combination of milk and honey, especially launched for the southern market. THE MARKETING STRENGTH The extensive distribution network, built over the years, is a major strength for Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote places and in the smallest of villages with a population of just 500.Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network. The Parle marketing philosophy emphasizes catering to the masses. They constantly endeavor at designing products that provide nutrition & fun to the common man. Most Parle offerings are in the low & mid-range price segments. This is based on their understanding of the Indian consumer psyche. The value-for-money positioning helps generate large sales volumes for the products. However, Parle Products also manufactures a variety of premium products for the up-market, urban consumers. And in this way, caters arrange of products to a variety of consumers.

Marketing Management 14 Product Life Cycle

STAGE 4 DECLINE
1. 2. 3. 4. 5. 6. 7. The marketing objective of this stage is to reduce expenditure and milk the brand It is a phase out weak for the product The price is cut Distribution is selective Outlets are unprofitable Advertising is reduced to level needed to retain hard-core loyals. Sales promotion is reduced to minimal levels

Example of a product in this stage is NOKIA INDIA

1. 2. 3. 4. 5. 6. 7. 8. 9.

It is a finland based company. It is the second highest mobile set manufacturer after Samsung in the world in 2012. Has suffered immensely in last 5 years with Apple and Samsung eating its market share. Share price has fallen from US $40 in 2007 to US $3 in 2012. It lacks innovation The Symbian operating system was outdated. Strategic partnership with Microsoft. Infusing life into their products to come out of Decline. The Main Market for Nokia in India is the ever growing rural market as of now.

Marketing Management 15 Product Life Cycle

10. Nokia Used to use skimming method of pricing in the Indian market. E.g. Nokia 1100 @ Rs. 4000. 11. Now it is using Penetrative Pricing method. 12. India has some 95,000 outlets that sell mobile phones. "In 50,000 of them -- and that's a conservative estimate -- only one brand is available, Nokia,“ -2004 13. Nokia on the decline now , is distributing selective products to a selective stores. 14. Nokia is Advertising selectively. 15. They are focusing on their main brand now that is the NOKIA LUMIA. 16. Advertisements focus more on the innovative aspects of their new brands to enhance brand switching. 17. Celebrity Shah Rukh Khan is being used to have a turn around. 18. Sales are being promoted through “The Amazing Money Back Challenge” , “Blown Away by the Lumia” , “Smoked by windows phone challenge” , “The Amazing Everyday Campaign” ,etc

Marketing Management 16 Product Life Cycle

EXAMPLE SHOWING ALL THE STAGES________________________ iPOD Classic :

PLC CHART OF THE IPOD :

INTRODUCTION STAGE :

1. 2. 3. 4. 5. 6. 7. 8.

Launched in trademark “Apple style” in 2001. Main USP of the Product was its “ULTRA PORTABILITY” & Apple Design One of a kind product , leaving competition behind. The first iPod featured a 5 GB hard drive capable of storing 1,000 songs encoded using MP3 and was priced at US$399 Already a Brand. New Concept and Digital Technology. Advertising was mainly done through television commercials. Sales promotion was done through –Holiday sales, Rebates, Point of Purchase Display

Marketing Management 17 Product Life Cycle

GROWTH STAGE :

1. 2. 3. 4. 5. 6. 7. 8. 9.
10.

A much wider product range was introduced as shown above. There were 6 variants of the iPod classic that were introduced in the market Pricing :The price band expanded. Distribution : The Distribution was more Intensive. Advertising : Increase in Advertising to create awareness of the new iPod classic variations. Sales Promotions : Fall in sales promotions because of the Pick up in sales. Pricing :The price band expanded. Distribution : The Distribution was more Intensive. Advertising : Increase in Advertising to create awareness of the new iPod classic variations. Sales Promotions : Fall in sales promotions because of the Pick up in sales.

MATURITY STAGE :

1. 2. 3. 4.

Marketing objective is to maximize profit while defending market share Product : Diversification had taken place by the introduction of new technology. The main competitors are Archos 605 , Microsoft Zune , Ibiza Rhapsody Once a brand always a brand

Marketing Management 18 Product Life Cycle

5. Continuous innovation. 6. Leaving behind competition. 7. Conformity to customer needs in the best way meant that music was associated with the ipod. 8. No need to change its advertising patterns or induce customers to switch brands.
DECLINE STAGE :

So far the life cycle of the product shows that it has a long way to go before it reaches the decline stage

Marketing Management 19 Product Life Cycle

CONCLUSION
It is important for marketing managers to understand the limitations of the PLC model. It is difficult for marketing management to gauge accurately where a product is on its life cycle. A rise in sales per se is not necessarily evidence of growth, a fall in sales per se does not typify decline and some products, e.g. Coca Cola and Pepsi, may not experience a decline. Differing products possess different PLC "shapes". A fad product develops as a steep sloped growth stage, a short maturity stage, and a steep sloped decline stage. A product such as Coca Cola and Pepsi experiences growth, but also a constant level of sales over a number of decades. A given product (or products collectively within an industry) may hold a unique PLC shape such that use of typical PLC models are only useful as a rough guide for marketing management .For specific products, the duration of each PLC stage is unpredictable and it's difficult to detect when maturity or decline has begun. Because of these limitations, strict adherence to PLC can lead a company to misleading objectives and strategy prescriptions.

Marketing Management 20 Product Life Cycle

BIBLIOGRAPHY Marketing Management-Kotler,Keller,Koshy & Jha-13th edition

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