Product Life Cycle

PRODUCT LIFE CYLE

• The course of a products sales and profits over its lifetime is
called the Product Life Cycle.

• The product life cycle is based upon the biological life cycle

• The PLC concept can be applied to what are known as

styles, fashions, and fads.

• The PLC concept can described a product class, a product

form, or a brand. The PLC concept applies differently in
each case.

• Not all the product follows the product life cycle.

 Product Life Cycles and Product Portfolio
• Product Life Cycle – shows the stages that products
go through from development to withdrawal
from the market
• Product Portfolio – the range
of products a company has in development or
available for consumers at any one time
• Managing product portfolio is important for cash
flow
 Product Life Cycles

• Product Life Cycle (PLC):

– Each product may have a different life cycle
– PLC determines revenue earned
– Contributes to strategic marketing planning
– May help the firm to identify when
a product needs support, redesign, reinvigorating,
withdrawal, etc.
– May help in new product development planning
– May help in forecasting and managing cash flow
 Product Life Cycles
• The Stages of the Product Life Cycle:
– Development
– Introduction/Launch
– Growth
– Maturity
– Saturation
– Decline
– Withdrawal
 Product Life Cycles

• The Development Stage:

• Initial Ideas – possibly large number
• May come from any of the following –
– Market research – identifies gaps in the market
– Monitoring competitors
– Planned research and development (R&D)
– Luck or intuition – stumble across ideas?
– Creative thinking – inventions, hunches?
– Futures thinking – what will people be using/wanting/needing
5,10,20 years hence?
 Product Life Cycles
• Product Development: Stages
– New ideas/possible inventions
– Market analysis – is it wanted? Can it be produced at a
profit? Who is it likely
to be aimed at?
– Product Development and refinement
– Test Marketing – possibly local/regional
– Analysis of test marketing results and amendment of
product/production process
– Preparations for launch – publicity, marketing
campaign
 Product Life Cycles

• Introduction/Launch:
– Advertising and promotion campaigns
– Target campaign at specific audience?
– Monitor initial sales
– Maximise publicity
– High cost/low sales
– Length of time – type of product
PRODUCT LIFE CYCLE OF
“ To make cleanliness commonplace, to lessen work
for women, to foster health and contribute to
personal attractiveness, that life may be more
enjoyable and rewarding for the people who use
our products.

William Hesketh Lever

”
Doing well and doing good.
INTRODUCTION TO PRODUCT LIFE CYCLE
• The course of a products sales and
profits over its lifetime is called the
product life cycle.

• PLC shows the stages that products go through

from development to withdrawal from the
market.

• Product Life Cycle (PLC):

– Each product may have a different life
cycle.

– PLC determines revenue earned.

– Contributes to strategic marketing planning

– To identify when a product needs support,

redesign, renovating , withdrawal, etc.
 PLC OF LUX SOAP
• INTRODUCTION TO LUX:

“GLAMOUR FACTOR”

• We all want to be pampered, to look and feel great And that's just what Lux offers you on a
daily basis at a price you can afford.

• Lux is the brand of UNILEVER INDIA LTD. It has been winning hearts of INDIAN consumers
for 80 years.

• Lux stands for the promise of beauty and glamour as one of India's most trusted personal
care brands.
LUX PRODUCTS : Lux had modified their product into:

• Orchid touch Almond delight Energising fruit Aqua sparkle

 INTRODUCTION STAGE
• Lux launched the world’s first mass-market beauty soap in the US in 1924 & had been
launched in India in 1929.

• At that time there was only one competitor of Lux, which was from its own brand
“LIFEBUOY”.

• In the initial stages Lux was introduced in the major cities of INDIA like Calcutta, Mumbai etc.

• MARKETING OBJETIVES - was to create the product awareness and to attract the
customers towards the product.

• The Lux MARKETING STRATEGIES in the initial stages :

• Product = They offer only on product in the market. They did not come up with the
differentiated product.

• Price = In the initial stages of the product, they offer the relatively higher price than their
competitor (LIFEBUOY). Because, they want to recover their initial cost of making the
product.
 INTRODUCTION STAGE continued…
• Advertising = In the initial stages, they allocate more advertising budget So that more and
more customers could be attracted towards the product.
• In ads they targeted the early adopters, who were readiest to buy the product.
• The first ambassador, Leela Chitnis.

Distribution = was selective and only covers the major cities of INDIA to get recognition in
those cities.
• Their distribution channel was through: Manufacturer Wholesaler & Retailer

Introduction
IntroductionStage
Stageofofthe
theLUX
LUX
Low
Lowsales
sales
Sales
Sales
High
Highcost
costper
percustomer
customer
Costs
Costs
Negative
Negative
Profits
Profits

Create
Createproduct
productawareness
awarenessinin major
majorcities
citiesininIndia
India
Marketing
MarketingObjectives
Objectives

Product
ProductStrategy
Strategy Offer
Offeraabasic
basicproduct
product

Price
PriceStrategy
Strategy Use
Usecost-plus
cost-plus

Distribution
DistributionStrategy
Strategy Build
Buildselective
selectivedistribution
distribution
Build
Buildproduct
productawareness
awarenessamong
amongearly
earlyadopters
adoptersand
and
Advertising
AdvertisingStrategy
Strategy dealers.
dealers.
Film stars promoting the product Lux
 Product Life Cycles

• Growth:
– Increased consumer awareness
– Sales rise
– Revenues increase
– Costs - fixed costs/variable costs, profits may
be made
– Monitor market – competitors reaction?
 GROWTH STAGE
• In the growth stage, their sales rapidly started rising.
• They have expanded their market to the other cities of INDIA.

• MARKETING OBJECTIVES = The marketing objectives of the Lux were to expand their
market to the other cities of INDIA.
• Another objective was to maximize more market share.
 
• In the growth stage, company had the following MARKETING STRATEGIES :

• Product = In the growth stage, the company had offered the same product in the market.

• Price = In this stage, the company had changed their price to some extent because of
maximizing the market share. ( Slightly cut down the prices )

• Advertising = In the growth stage, they had increased their advertising budget as in the
initial stages because of attracting the new customers or to retain the existing customers.
• Sharmila Tagore, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit, Sridevi
 GROWTH STAGE CONTNUED….
• Distribution = In this stage, company had expanded their market to the other cities of
INDIA. Their distribution channel was the same as in the initial stages of the product.

• Promotion = In the growth stage, the company had also used the different proportioning
strategies to attract the new and the existing customers.

Growth
GrowthStage
Stageofofthe
theLUX
LUX

Sales
Sales Rapidly
Rapidlyrising
risingsales
sales

Costs
Costs Average
Averagecost
costper
percustomer
customer

Profits
Profits Rising
Risingprofits
profits

Marketing
MarketingObjectives
Objectives Maximize
Maximizemarket
marketshare
share

Product
ProductStrategy
Strategy Offer
Offerproduct
productextensions,
extensions,services
services

Price
PriceStrategy
Strategy Price
Priceto
topenetrate
penetratemarket
market

Distribution
DistributionStrategy
Strategy Build
Buildintensive
intensivedistribution
distribution

Advertising
AdvertisingStrategy Build
Strategy Buildawareness
awarenessand
andinterest
interestininthe
themass
massmarket
market
 Product Life Cycles

• Maturity:
– Sales reach peak
– Cost of supporting the product declines
– Ratio of revenue to cost high
– Sales growth likely to be low
– Market share may be high
– Competition likely to be greater
– Price elasticity of demand?
– Monitor market – changes/amendments/new
strategies?
 MATURITY STAGE

• They modified the product by adding some changes in the product.

• In this stage, few competitors enter into the market like ( CINTHOL, FAIRGLOW,
SANTOOR, CHANDRIKA, FIAMA DI WILLS and VIVEL ).

• The company has expanded their market to almost all the cities of INDIA.
 
• MARKETING OBJECTIVES = The marketing objective of Lux is to maximize more profit
while defending the market share. And to expand the market to all the cities of INDIA.
 
• MARKETING STRATEGIES In this stage are based on:

• Product = The Lux has made the modification in the product by introducing:
Lux Almond, Lux Orchid , Lux Fruit, Lux Saffron, Lux Sandalwood, Lux Rose,
Lux International, Lux Chocolate, Lux Aromatic Extracts, Lux Oil and Honey.etc
 
• Price = The Lux products are now available at higher prices in the market, the reason
behind is that the company’s marketing objectives is to maximize more profit.

• Distribution = Now Lux products are available in almost all the cities of INDIA. Their
distribution channel is same as in the initial stage.
 MATURITY STAGE CONTINUED…
• Advertising = In this stage Lux advertising has been reduced to some extent because of
the more brand awareness in the minds of customers.
Recently, they have shown Aishwarya Rai , kareena kapoor & Shah Rukh khan .

• PROMOTIONAL OFFERS : ----

• Like buy 3 get 1 free.

Maturity
MaturityStage
Stageofofthe
theLUX
LUX

Sales
Sales Peak
Peaksales
sales

Costs
Costs Low
Lowcost
costper
percustomer
customer

Profits
Profits High
Highprofits
profits
Marketing
MarketingObjectives Maximize
Objectives Maximizeprofit
profitwhile
whiledefending
defending market
marketshare
share
Product
ProductStrategy
Strategy Diversify
Diversifybrand
brandand
andmodels
models
Price
PriceStrategy
Strategy Price
Priceto
tomatch
matchor
orbest
bestcompetitors
competitors

Distribution
DistributionStrategy
Strategy Build
Buildmore
moreintensive
intensivedistribution
distribution
Advertising
AdvertisingStrategy
Strategy Stress
Stressbrand
branddifferences
differencesand
andbenefits
benefits
 Product Life Cycles
• Saturation:
• New entrants likely to mean market is ‘flooded’
• Necessity to develop new strategies becomes more pressing:
– Searching out new markets:
• Linking to changing fashions
• Seeking new or exploiting market segments
• Linking to joint ventures – media/music, etc.
– Developing new uses
– Focus on adapting the product
– Re-packaging or format
– Improving the standard or quality
– Developing the product range
 Product Life Cycles

• Decline and Withdrawal:

– Product outlives/outgrows its usefulness/value
– Fashions change
– Technology changes
– Sales decline
– Cost of supporting starts to rise too far
– Decision to withdraw may be dependent on availability
of new products and whether fashions/trends will
come around again?
 DECLINE STAGE
• Besides of all campaigns for the sales promotion of Lux .The reasons for its decline are :

• 1. Currency fluctuations: Unilever products are in over 100 countries worldwide, As a

result, it is exposed to adverse currency fluctuations.
• For instance, in 2004, a 5.9% decline in turnover was primarily due to a 4% appreciation in
the average Euro exchange rate.

• 2. SLOWDOWN: In year 2008 - 09 due to hard economic conditions in INDIA and other
countries the sales were highly affected as the consumer started looking for some
alternate products with a cheaper price than Lux.

• 3. Competition: Lux has been facing competition from HUL itself (Lifebuoy) & from other
companies like:-

• Godrej Consumer Products : GCPL, India’s second largest soap maker with 9.2% market
share.
• with leading brands such as CINTHOL, FAIRGLOW & NIKHAR.
• Fairglow brand, India's first Fairness soap, has created marketing history as one of the
most successful innovations.
 DECLINE STAGE CONTINUED…

Wipro : The presence of Wipro in the toilet soap industry can be seen through their brands such
as SANTOOR and CHANDRIKA.
• In the southern market of India it is a major market player in toilet soap.

ITC : It entered the segment last year and has made a strong headway in a short time by
growing to 1.75% in just five months. With the brands like: Superia, Fiama Di Wills and
Vivel.

Decline
DeclineStage
Stageofofthe
theLUX
LUX
Sales
Sales Declining
Decliningsales
sales

Costs
Costs Low
Lowcost
costper
percustomer
customer

Profits
Profits Declining
Decliningprofits
profits

Marketing
Marketingobj
obj Reduce
Reduceexpenditure
expenditureand
andmilk
milkthe
thebrand
brand
Product
ProductStrategy
Strategy Phase
Phaseout
outweak
weakitems
items
Price
PriceStrategy
Strategy Cut
Cutprice
price

Distribution
DistributionStrategy
Strategy Go
Goselective:
selective:phase
phaseout
outunprofitable
unprofitableoutlets
outlets

Advertising
AdvertisingStrategy
Strategy Reduce
Reduceto
tolevel
levelneeded
neededto
toretain
retainhard-core
hard-coreloyal
loyal
customers
customers
 Product Life Cycles
Sales
Development Introduction Growth Maturity Saturation Decline

Time
 Product Life Cycles
Sales

Effects of Extension
Strategies

Time
 Product Life Cycles
Sales/Profits PLC and Profits

PLC

Profits

Time
Losses
Break Even
SHORT LIFE SPAN OF FEW
PRODUCTS
 Challenges in Creating Brand Equity for
Products with Short PLC
• Short attention span of the present generation
• Varying Consumer Choice
• Lack of availability of the product at all joints
• Expensive with no long term benefits
• Lack of significant usage
• Disappearance of motivating factors that induce buying
behavior
• Fatigue Factor
• Utility of the product is for a short period and/or a
specific cause:
 The Solutions proposed
• Building Brand equity for a fad involves overcoming the challenges posed by the
inherent nature of its PLC. The following ways are suggested to build Brand
equity for such products.
• 1. Brands undertaking Corporate Social Responsibility for a particular cause or
on philanthropic grounds. These ideas of “socially responsible marketing” can
build Brand equity for products with short life cycle.
– Example: LiveSTRONG bands have created awareness about sensitive topics such as AIDS
& undertaken a great responsibility. This has build Brand equity for such products.
• 2. Firms with strong Brand equity can bring in Fads under the Umbrella of
Family branding. This would help in easy brand recognition. Creating a product
line with relevance to the fad will help in product usage. This would help in
creating Brand equity for the fad & attract consumers with high brand loyalty.
– Example: Adidas’ Wide skate shoes with fat laces came under Family branding. To sustain
the Brand equity of such products, a product line of such fads have to be built.
 Further
• 3. Bringing in innovation in products to reduce choices, hence reducing the
fatigue factor, increase utility of the fad & cut down prices.
– Example: Apple ipod is an innovative product building brand equity for its parent
company. Continued innovations in the product shall optimize cost too.
• 4. Strong advertising through print media, television, radio & public
relations. This would help in increasing the attention span of the product
from consumer’s perspective.
– Example: World Wrestling Federation, being a fad, was strongly advertised through
media. Thus, creating Brand equity for itself.
• 5. Co-Branding with a high Brand equity brand, can help a fad channel
through its partner’s distribution channels. Thus reducing the problem of
lack of availability.
– Examples: The recent trend of companies enjoying high Brand equity co-brand with
fads from Bollywood movies, as in case of Archies co-branding with Amitabh Bacchan
starer “Waqt-A race against time” for a soft toy.
 Conclusion
• The PLC concept can be applied by marketers as a
useful framework for describing how products and
markets work. But using the PLC concept for
forecasting product performance or for developing
marketing strategies presents some practical
problems.. In practice, it is difficult to forecast the
sales level at each PLC stage, the length of each
stage, and the shape of the PLC curve.