PRODUCT LIFE CYCLE A company’s differentiating and positioning strategy must change as the product, market, and competitors change over time. For that it is important to understand the concept of product life cycle and the changes that are normally made as the product passes through each stage ot the life cycle. THE CONCEPT OF THE PRODUCT LIFE CYCLE 1. Products have limited life. 2. Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. 3. Profit rise and fall at different stages of the product life cycle. 4. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in such stage of their life cycle. Most product life cycle curves are portrayed as bell-shaped curves. This curve is typically divided into four stages:
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PRODUCT LIFE CYCLE
A company’s differentiating and positioning strategy must change as the product, market, and competitors change over time. For that it is important to understand the concept of product life cycle and the changes that are normally made as the product passes through each stage ot the life cycle.
THE CONCEPT OF THE PRODUCT LIFE CYCLE
1. Products have limited life.2. Products sales pass through distinct stages, each posing different challenges,
opportunities and problems to the seller.3. Profit rise and fall at different stages of the product life cycle.4. Products require different marketing, financial, manufacturing, purchasing, and human
resource strategies in such stage of their life cycle.
Most product life cycle curves are portrayed as bell-shaped curves. This curve is typically divided into four stages:
Introduction Growth Maturity Decline
SalesCostsProfits
Marketing ObjectivesProduct
Price
Low sales High cost per customerNegativeCreate product awareness
and trialOffer a basic productUse cost-plus
Distribution Build selective distributionAdvertising
Build product awareness
among early adopters and
dealers
SalesCostsProfits
Marketing ObjectivesProduct
Price
Rapidly rising sales Average cost per customerRising profitsMaximize market shareOffer product extensions,
service, warranty
Price to penetrate marketDistribution Build intensive
distributionAdvertisingBuild
awareness and interest in the mass market
INTRODUCTION STAGE OF PLC
GROWTH STAGE
SalesCostsProfits
Marketing ObjectivesProduct
Price
Peak salesLow cost per customerHigh profitsMaximize profit
while defending market shareDiversify brand
and modelsPrice to match or best competitorsDistribution
Build more intensive distributionAdvertising
Stress brand differences and
benefits
MATURITY STAGE
SalesCostsProfits
Marketing Objectives
ProductPrice
Declining salesLow cost per customer
Declining profitsReduce expenditure and milk the brandPhase out weak
itemsCut price
DistributionGo selective:
phase out unprofitable
outletsAdvertisingReduce to level
needed to retain hard-core loyal
customers
DECLINE STAGE
ABOUT THE COMPANY
Cadbury started in 1824 by John Cadbury. In India, Cadbury began its operation in 1948 by importing chocolates. Cadbury India operates in four categories mainly Chocolate Confectionery, Milk Food
Drinks, Candy and Gum category. Cadbury enjoys a value market share of over 70%- the highest Cadbury brand share in
the world.
PRODUCTS HANDLED
Indian brands include:
Dairy Milk
5 star Perk Tempetation Celebrations Éclairs Gems
Bytes Bournvita
PRODUCT LIFE CYCLE OF CADBURY
• Cadbury is in its Maturity Stage as its revenue growth was up 12% and in India it grew up by 23%.
• New add-ons are being added to keep the excitement on and to stay in the market in pace with their competitors.
• Cadbury has kept a good look on their competitors and does spends a good amount on advertisements by endorsing Brand Ambassadors for Cadbury (Amitabh Bacchan) and also coming with brand extension with new products.
• 5 Star has come out of its growth stage and entered the Maturity Stage and hence we are seeing few extensions in the product (Crunchy and Fruit & Nut) to keep that product developing.
RE LAUNCHING
Cadbury is re-launching the product because the product has crossed the maturity stage of the product life cycle. Once the product finishes its maturity level, the sales may start decreasing so in order to increase the sales by 3-5% and keep the product in touch with the competition the product is re-launched.
As India is emerging market, hence the company forecasts the sales of the hocolates to grow by 8% after launching 5 Star Jelly in different flavours.
Target audience will be small school going kids mostly in rural areas who will give this Rs. 2 as gift to all their friend on their birthday.
5 STAR JELLY
Weight (in grams) 30 15 2
Price( in Rs) 10 5 2
INGREDIENTS
Nougat+Caramel63%, liquid glucose, sugar, hydrogenated vegetable oils, milk solids, cocoa solids, invert sugar, soya solids, salt, emulsifiers( E471), edible gum(412) and acidity regulator(526), milk chocolate 37%, sugar, cocoa butter, milk solids, cocoa solids, emulsifier( E442,E476) +fruit flavor+fruit jelly.
FLAVOURS
• Orange• Mango
• Strawberry• Pineapple
CONCLUSION
• Every product has a life cycle and every company focuses on extending it.
• Cadbury five star is present in the market from various decade so strategies are being made order extend the plc, so that customers can make more use of products.
• Re-packaging, innovating new flavors and promotional tactics can extend the product life cycle and the product can remain for a longer time in the market.
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