PLC Presentation

PRODUCT LIFE CYCLE• Ashwin Bangera• Kapil Laddha• Ritu More

• Viney Laddha

Product Life Cycle

There are basically 4 stages in PLC namely Introduction Growth Maturity Decline

Characteristics in various stages

Introduction Costs are very high Slow sales volume to start Little or no competition Demand has to be created Customers have to be promoted to buy

the product Makes no money at this stage

Growth Stage Cost reduces due to economies of scale Sales volume increases significantly Profitability begin to rise public awareness increases competition begins to increase with a few

new players in establishing market increased competition leads to price

decreases

Maturity Stage costs are lowered as a result of production

volumes increasing and experience curve effects sales volume peaks and market saturation is

reached increase in competitors entering the market prices tend to drop due to the proliferation of

competing products brand differentiation and feature diversification

is emphasized to maintain or increase market share

Industrial profits go down

Saturation & Decline stage costs become counter-optimal sales volume decline prices, profitability diminish profit becomes more a challenge of

production/distribution efficiency than increased sales

Case Study – Bajaj Chetak

Brief Introduction BAJAJ CHETAK was a popular Indian made motor

scooter produced by the Bajaj auto company. Chetak was the only choice for millions of Indian

families as an affordable way of transport for decades.

Most middle-class Indians preferred scooters because of their durability , low maintenance costs, and versatility and compared to the motorcycles available in India were heavier and not as fuel efficient as scooters and were even costlier.

Product & PLC

Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measuresIt is based on the 4 pivotal points of its core understanding: That products have a limited life. Also product sales pass through distinct stages, each

posing different challenges, opportunities, and problems to the seller.

The profits rise and fall at different stages of product life cycle.

Lastly products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Schematic Graph of PLC

Stage I-Introduction

Starting Price Quoted in the start was roughly between Rs. 80009000/- Chetak remained Bajaj·s flagship brand for over 10 years. There was a time when people had to wait hell lot of a time after

prebooking their Chetak. The Launch of Bajaj Chetak was mainly targeted at economical

Classand people could afford it considering its parallel competition in thesame segment market. Late 70s had been the Golden period for the Bajaj scooters,especially the Chetak. In 1977 Bajaj Auto claimed to have sold a lakh of Chetaks in just

oneFY

Stage II-Growth

Some of the Significant changes brought about in this scooter was change in many tech specs, mainly compared to its competiton from Motorbikes, Mopeds which were gaining grounds in term ofmarket share.

Over 2 and a half decades until the halt of 1995 the company did not face any stiff competition from any 2 wheeler market segment, apart from the introduction of minor changes in its performanceparameters meaning more augmented changes in the scooter itself like color some peripheral outer changes in parts

The Price wars was not the criteria for the competition as the demand itselfsurpassed the supply and in India owning scooter at that time was a statussymbol. Bajaj Chetak had targeted the soft spot of what most Indian people in thattime desired in their two wheelers which was durability, low maintenancecosts, and versatility, and the ease of its use which made it the mostdependable and flexible transport mode.

Briefly this Scooter is a comfortable riding machine, much economical toyour bank balance as compared to bikes, long lasting and durable, does notneed much repairs and when it does the spares are easily available andinexpensive.

The main marketing strategy used by Bajaj Chetak was mainly targettingthe emerging middle class in India and adding the feeling of 'we' or the feelingof belongingness by strong sentimental slogans like "Hamara Bajaj". TheApproach of this Marketing Strategy adopted by Chetak was Non-Pragmatic

Stage III- Maturity

In the late 1990s, the Indian two-wheeler market witnessed a shift in

consumer preferences.The popularity of geared scooters began to wane

while that of Motorcycles soared. There were various reasons for the shift -India was

undergoing ademographic change, with the proportion of younger people in

thepopulation growing significantly; the economy was growing,

whichincreased the disposable incomes of the middle class; also, many

newermodels of motorcycles, with improved designs and modern

technology had become available in the market.

While these changes were taking place in the market, the features of

scooters, especially those of the Bajaj Chetak, remained essentially

unchanged

Stage IV-Decline

The primary reason is that the Brand forgot the customers.Another case of Marketing Myopia. The company failed tounderstand the changing perception of the customerstowards scooters. Rather than looking at the customers, thecompany focused on influencing Government to block theopening up of economy. Bajaj never did anything with theproduct. For 40 years Chetak had the same look, samequality and style.

During the mid nineties the company realised lately that thesegment has shifted to motorcycles. Scooters were no longerthe option.

Thank You

Introduction

DeathPLC