SESSION 4:PRODUCT LIFE CYCLE

PRODUCT LIFE CYCLE

The product life cycles: 

1. Introduction: A period of slow growth, because the product is just introduced in the market, the profits here are non existent due high cost of advertising and other product introduction strategies.

 introduction stage of lux:

Lux launched world's first mass market beauty soap in US in 1924 and had been launched in India in 1929. At that time there was only 1 competitor which was lifebuoy which was Unilever's own brand. Lux was launched in major cities of India like Mumbai, Calcutta etc.

market strategies in introduction phase:

MARKETING OBJECTIVE: to create brand awareness in major cities of India.

PRODUCT: just entered with 1 product, no differentiation initially.

PRICE: their initial price was slightly higher than their competitor lifebuoy, as the initial costs were to be recovered.

ADVERTISING: They invested a pretty high amount in advertising as they wanted to creat

e brand awareness and targeted early adopters who were ready to buy the product. their first brand ambassador was Leela Chitnis.
DISTRIBUTION: the distribution was very selective, as they launched in major cities only, and channel was through manufacturer, whole seller and retailer.

2. Growth: A period of rapid market acceptance and substantial profit improvement.

market strategies in growth phase:

MARKETING OBJECTIVE: To expand their market in different cities of India and expand their market share.

PRODUCT: It remained same till this phase.

PRICE: Price was slightly cut down, in order to increase the market share.

ADVERTISING: In this stage, they increased the budget to retain the customers and attract new customers. Many top naught actresses were signed like Juhi Chawla, Hema Malini, Zeenat Amaan, Madhuri Dixit, Sharmila Tagore and Sridevi.
Distribution: Their distribution channels expanded as their market increased to different cities.

3. Maturity:  A slowdown in sales growth, because the product has achieved acceptance by most potential buyers. I believe this to be more of a stable stage for the product,where the graph is almost flat. looking at Lux soaps, many competitors entered into the market like Cinthol, Fiam Di Wills, Santoor etc.

market strategies in maturity phase:

MARKETING OBJECTIVE: It was to defend it's market share, maximize profit and expand their market in rural as well as urban and sub urban areas.
PRODUCT: The product innovated and introduced new products like Lux almond, Lux Orchid, Lux chocolate etc.
PRICE: The price is very competitive to sustain and increase the market share.
DISTRIBUTION: The network became robust, strong and effective because the reach increased to all urban, sub urban , and rural places.
ADVERTISING: They still continued to indulge top actresses, and they did the best innovation by signing shah rukh khan as the brand ambassador.

4. Decline: Here the sales show a downward drift and profits decrease. This is where the company has to really think of ways to get its product back in business. It may try hard at advertising, or may be add new features, but basically come with a new marketing strategy to increase its falling profits.

They are as follows:
·                     Growth - Slump - Maturity Pattern:  Here the sales rapidly grow as the product is introduced, and the fall with the same rapid rate.It is then sustained by late adopters. Such a trend is usually seen in small kitchen appliances products like toasters.

·                     Cycle - Recycle Pattern: Here the sales grow rapidly and fall too. But then the company gives a promotional push and again the sales  grow or again the first cycle is repeated. This second cycle is usually of a shorter duration. The best example could be Bournvita, the chocolate drink which was later introduced with a new pack and claimed to be better than before due to new and improved ingradients.

·                      Scalloped Pattern: Here sales pass through a succession of life cycles based on the discovery of new product characteristics, uses or users. For example: The sales of nylon show this pattern because the many new uses - Parachutes, shirts, boat sails etc. that continue to be discovered over time.