PRODUCT LIFE CYCLE(PLC) &
INDUSTRY LIFE CYCLE(ILC)
A company's positioning and differentiation
strategy must change as the product, market and competitors vary over the
Product Life Cycle. to say that a product has a life cycle consist of four
things:-
1. Products have limited life
2. Product sale passes through different
stages, each posing a different challenge and opportunity to seller.
3. Profits rise and fall at different stages
of life cycle.
4. Products need different strategies in
different life cycles.
The product life cycles:
1. Introduction: A period of slow growth,
because the product is just introduced in the market, the profits here are nonexistent
due high cost of advertising and other product introduction strategies.
For Colgate-
- 1873 Colgate toothpaste introduced in jars to market.
- 1986 Colgate toothpaste sold in tubes called as Colgate ribbon.
- 1937 Colgate entered Indian market.
- 1949 it touched a new height in India.
- 1976 it tried to growth it's sales in India by launching YOUNG INDIA PROGRAM -"bright smile becomes brighter".
2. Growth: A period of rapid market
acceptance and substantial profit improvement.
For Colgate-
- 1990 to 2003 Colgate reaches out to every rural customer and strengthen it's supply chain.
- Colgate herbal white toothpaste launched.
- 2003-2007 Colgate awarded no.1 toothpaste brand for 7 consecutive years.
- Colgate acquired 51% market share during this period.
- launched many initiatives and promotions to further increase it's sale
- as it's initiative it started oral care weak and targeted schools and anganwadis.
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.
For Colgate-
- HUL and P&G emerged as major competitors for Colgate.
- With some other niche player Colgate facing tough competition in toothpaste market.
- they roped SRK as their brand ambassador in 2009
- oral health month launched in 2010.
- colgate with IDA worked to develop toothpastes for different needs of customer.
- 2011-2013many variants of Colgate toothpaste launched.
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.
Sometime there are some variation due to product and policies by companies.
they are-
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.
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.
For colgate-
- Colgate is using this strategy to re-introduce it's sales growth.
- now-a-days Colgate is doing promotions and activation events in most of the malls and housing communities to turn some potential customers into customers.
- they are rigorously doing advertisements on t.v,radio and print media.they have hiked spending rate on advertisements.
- in India they are focusing youth and launching youth eccentric toothpastes.they are also taking sonakshi sinha and sonam kapoor as their brand ambassador to woo new customers.
Scalloped Pattern- Here sales pass through a succession of life cycles based on the discovery of
new product characteristics, uses or users.
Marketing strategies for Introduction Stage: Since the profits are really low
due to all the introduction costs, the company has to carefully plan its
introduction strategy. Being first in the market can be rewarding in case of a
new to the world product, but may also be disastrous. It is also a lot more
expensive to be the first to enter as the consumers and customers are not aware
of the product and hence a lot is spent in creating awareness.
Marketing Strategies for Growth Stage: This is the stage of rapid growth.
New competitors enter, to cash in on the success of your product. Prices remain
same or fall slightly depending on the demand. Sales rise faster than
promotional expenditure. Companies must improve the quality of the product, add
new features etc.
Marketing Strategy for Maturity Stage: At some point, the rate of sales
will slow and the product will enter a stage of maturity. Companies may use different
modifications to raise their sales and profits in this stage. They may try and
modify the market, which means expand their market. They may also try and
modify the product. Here the company may improve the quality of the product and
also improve the functionality of it. They may use words like bigger, new, or improved etc in their advertising so catch the customer's attention over their
competitor. They may also improve the products aesthetic appeal. The only hitch
in this is that consumers may not always like the new and improved features .The
Company in this stage must also look at customer feedback to understand in a
better way as to how it can help in satisfying the consumer.
Marketing Strategy for Decline Stage:
Sales decline for a number of reasons like technological advance, change
in consumer tastes, or increased competition. Unless strong reasons for
retention exist, carrying a weak product proves very costly for a company. The
appropriate strategy also depends on the attractiveness of the market and the company’s
competitive strength in he market. In the decline stage a company may drop its
weak products; basically we are talking about phasing out a product.
