The Product Life Cycle

The Product Life Cycle The  product life cycle  is an important concept in marketing.   It explains the stages a product goes through from when it was first thought of until it finally is removed from the market. All products does not reach this final stage.   Some continue to grow and others rise and fall.  So ,this is basically an idea of product life cycle. Product life-cycle management  (or  PLCM) is the succession of strategies used by business management as a product goes through its  life cycle . The situation or condition in which product is sold (advertising, saturation) keep changes over time  . Aim The aim of P.L.C. are to minimize time to market, improve product quality, minimize prototyping costs, identify potential sales opportunities and revenue contributions, and minimise worst impacts at end-of-life. To create successful new products the company must comprehend its customers, markets and competitors.so the company focus on these factors. DEFINITION All products have a particular life time, which is called the product life cycle. The life of time a product is on the market is highly dependent on its competition, technology and even the understanding of a companys marketing department. One of the best ways of extending a products life cycle is to regularly collect feedback from consumers, finding out what they need and want from a particular product. Genrally product life cycle has four stages which are as follows: Introduction Stage After a company develops a product and tests its feasible among consumers, the product is usually introduced to the market. This first part of a products existence is called the introduction stage. A company is usually trying to build both advertising and brand awareness of the product in the introduction stage. So thats why the company cost remain relatively high.. The first pricing strategy would be to enter the market with a high price in hopes of regain initial production and advertising costs.. Growth Stage The growth stage is when product sales start to grow exponentially, especially when the product is at high demand. At this stage, competition will grow as other companies create competitive products. The market leader or first company in the industry to create the product will usually maintain its starting price as the sales are incrementing obviously price is acceptable to cuctomer. Saturation Stage Competition will eventually start reaching a saturation point over time. Companies will for a position in the market to compete with the leading company. At this point, it will be difficult for new competitors to enter into the market. Some may even go out of business. Market saturation will eventually force companies to lower prices. It is during this stage that consumer research is extremely important. A company will want to determine what features, styles or flavors of the product in question consumers want so it can differentiate its product from competitors. A company may also discover that the consumers want additional products. Hence, the companys best strategy is to extend its product line to include these additional products. Declining Sales Stage Eventually, product sales will start declining unless a company finds new uses or markets for its product. The decline stage may be haste occurence by new technology that replaces the outdated product. For example, the computer eventually replaced the typewriter. The company may also cut back on advertising during the decline stage. For example, black and white televisions are still in existence but are not promoted. sld00311.jpg (749-463) BEN SHARMAN Ben Sherman is a globally recognised lifestyle brand. It has grown from its business beginnings in quality shirts in Brighton in 1963 and is now sold in 35 countries around the world. It has expanded into the USA, Europe, and Australasia. In 2004, Ben Sherman was acquired by the American-based company, Oxford Industries. This group is an international apparel design, sourcing and marketing Ben Shermans name has always been closely linked with the British music scene and with fashion. Its customers are young and at the forefront of style. Throughout the years high profile customers include musicians, models, actors and bands, such as Blur, Oasis and the Kaiser Chiefs. The growth of the brand can be traced through changes in musical taste and this is a key part of Ben Shermans marketing strategy. Ben Sherman has developed a balanced marketing mix. This is often referred to as the 4 Ps product, price, promotion and place. By getting the mix right, the company ensures that its products reach the market segments it is aiming the brand at. This approach helps the business remain competitive and extends its market share and influence. The marketing mix is like a cake recipe. Most cakes need the basic ingredients of eggs, flour, sugar and milk. However, a childs birthday cake will require a different recipe to a wedding cake. The key is to combine the ingredients to get the right cake for the right occasion. The marketing mix works in exactly the same way. The key ingredients of product, price, promotion and place are all necessary for the appropriate marketing of the product. Ben Sherman chooses the right combination of each element to satisfy different customers needs. PRODUCT Ben Sherman has to decide whether to create a product and then market it to target customers (product-orientated) or find out what the market wants and then provide it (market-orientated) To achieve both, the company produces a wide product range that appeals to all its target market segments. The range includes casual clothes, formal wear, denim, footwear and lifestyle accessories, such as underwear, watches, bags, belts and fragrances. .Product life cycle Ben Sherman uses major fashion shows to launch its collections to the press. The fashion year has two cycles the spring/summer season and the autumn/winter one. The fashion industry is highly competitive and fast-moving. Fashion products tend to have a short life cycle. This means the time between the launch of a product and the point at which that product is mature is very quick. Competition amongst fashion retailers forces businesses to refresh their ranges a number of times in a year. This topping up modifies the product as it reaches the maturity stage. The boost of a new product or style then extends the life of the range. Products need refreshing to avoid the dip in sales during the Saturation stage of the life cycle which could result in an early decline. The additions and changes help sales rise again, earning extra sales revenue and profit, as well as maintaining the Ben Sherman brand in the market. PRICE Ben Sherman has to assess which markets its products are aimed at and set a price to match.There are a number of pricing strategies that a business can use for its products including: cost based pricing where the selling price is set to cover the cost of manufacture. market orientated pricing. Market orientated pricing covers several different approaches: market penetration, where a new product is priced low to attract a high volume of sales market skimming where a new product has premium pricing to give high revenues whilst the product is unique in the market premium pricing, where there is a uniqueness and exclusiveness about the product so that it can command a high price economy pricing, which tends to be for no-frills, basic products where the cost of manufacture and marketing are kept to a minimumThe price of a product relates to its perceived value. Lower priced items will expect a higher volume of sales, whilst fewer sales of luxury products may achieve the same revenue through higher pricing. Low price brands often copy the market leaders and may be generic own brands, such as those produced by supermarket chains. The main purpose of price here is to indicate value for- money and such brands do not expect customers to show loyalty. Ben Sherman produces mostly medium-price range products. Its position in the market for clothing is shown on the product map diagram. The mix of product and price is clearly evident here. These brands are identifiable by their quality and style. PLACE This refers both to the places where Ben Sherman products may be bought and to the channels of distribution used to deliver the products to these places. Place is not always a physical building such as a retail outlet or shop, but includes any means by which the product is made available to the customer.A business has to balance getting enough of its products to its target customers against the problems or costs of distributing them. PROMOTION The purpose of promotion is to obtain and retain customers. It covers: above-the-line, which is using independent media to reach a wide audience easily, but over which the company may have limited control, for example, magazine advertising. This reaches a mass audience but can be hard to measure its impact. below-the-line, which uses media over which the business has control, for example, direct mailing. This type of promotion can be more cost-effective and give more measurable response rates. CONCLUSION Ben Sherman is a brand that appeals to the youth market. Its responsiveness to changing tastes in fashion and music throughout the last fifty years has provided it with a unique heritage of quality, personality and style. This has made Ben Sherman into a great British icon, reflecting British culture as it does business across the world. Whilst each element of the marketing mix is important in its own right, the right balance of the four elements is critical. MAGGI Different phases product life cycle of maggi Why  attanoodle  was  a  failure? Strategies taken to establish new productcategory What measures NIL should take to sustain theimage of a popular brand image. Stage at which maggiis in the product lifecycle. PRODUCT LIFE   CYCLE A concept that provides a way to trace thestages of a product ¶s acceptance, from itsintroduction (birth) to its  decline (death) INTRODUCTORY STAGE High failure rates No competition Frequent product modification Limited distribution High marketing and production costs Promotion focuses on awareness and  information Nestlà © India Ltd. (NIL), the  Indian subsidiary of the global FMCG major,Nestlà © SA, introduced the Maggibrand in India in 1982, with its launch of  Maggi2 Minute  Noodles, an instant  noodles product GROWTH STAGE Increasing rate  of sales Entrance of competitors Initial healthy profits Promotion emphasizes brand ads Prices normally fall Development costs are recovered 10 yrs back it  enjoyed around 50% market share in this  segment which was valued ataround 250 crores. . MATURITY STAGE Declining sales growth Saturated markets Extending product line Stylistic product changes Heavy promotions to dealers and consumers Prices and profits fall In  2003  Hindustan  Lever  Ltd  was all  set  to take on  Nestlesbestselling  Maggi2-minute noodles by launching a new category of liquid  snacks under it foodbrand, KnorrAnnapurna DECLINE STAGE Long-run drop in sales Large inventories of  unsold items Elimination of all non essentialmarketing expenses